Monitoring & Evaluation Officer’s Handbook 1

Government of AJK, Planning & Development Department

PART-I
Monitoring and Evaluation
ABOUT THE HANDBOOK
Introduction
This handbook deals with the basics of setting up and using a monitoring and evaluation
system for a project or an organization. It clarifies what monitoring and evaluation are,
how you plan to do them, how you design a system that helps you monitor and an
evaluation process that brings it all together usefully. It looks at how you collect the
information you need and then how you save yourself from drowning in data by
analyzing the information in a relatively straightforward way. Finally it raises, and
attempts to address, some of the issues to do with taking action on the basis of what you
have learned.
Need of Having Handbook on monitoring and evaluation
If you don’t care about how well you are doing or about what impact you are having, why
bother to do it at all? Monitoring and evaluation enable you to assess the quality and impact
of your work, against your action plans and your strategic plan. In order for monitoring
and evaluation to be really valuable, you do need to have planned well. Planning is dealt
with in detail in other toolkits on this website.
Application of the Handbook
The Handbook can helpful in following events:
• To set up systems for data collection during the planning phases of a project or
organization.
• To analyze data collected through the monitoring process.

• To know how efficiently and how effectively you are working.

• To evaluate what impact the project is having at any stage.
In fact, monitoring and evaluation are invaluable internal management tools. If you don’t
assess how well you are doing against targets and indicators, you may go on using
resources to no useful end, without changing the situation you have identified as a
problem at all. Monitoring and evaluation enable you to make that assessment.

Prepared by Lt Col ( R) Khalid Hussain Chohan, M&E Expert

Public Sector Capacity Building Project in AJK
Monitoring & Evaluation Officer’s Handbook 2
Government of AJK, Planning & Development Department
CHAPTER-1
BASIC CONCEPT OF MONITORING & EVALUATION
Monitoring is the systematic collection and analysis of information as a project
progresses. It is aimed at improving the efficiency and effectiveness of a project or
organization. It is based on targets set and activities planned during the planning phases of
work. It helps to keep the work on track, and can let management know when things are
going wrong. If done properly, it is an invaluable tool for good management, and it
provides a useful base for evaluation. It enables you to determine whether the resources
you have available are sufficient and are being well used, whether the capacity you have is
sufficient and appropriate, and whether you are doing what you planned to do.

Evaluation is the comparison of actual project impacts against the agreed strategic plans.
It looks at what you set out to do, at what you have accomplished, and how you
accomplished it. It can be formative (taking place during the life of a project or
organization, with the intention of improving the strategy or way of functioning of the
project or organization). It can also be summative (drawing learnings from a completed
project or an organization that is no longer functioning).

What monitoring and evaluation have in common is that they are geared towards learning
from what you are doing and how you are doing it, by focusing on:

• Efficiency
• Effectiveness
• Impact

Efficiency tells you that the input into the work is appropriate in terms of the output.
This could be input in terms of money, time, staff, equipment and so on. When you run a
project and are concerned about its replicability or about going to scale, then it is very
important to get the efficiency element right.

Effectiveness is a measure of the extent to which a development project achieves the

specific objectives it set. If, for example, we set out to improve the qualifications of
all the high school teachers in a particular area, did we succeed?

Impact tells you whether or not what you did made a difference to the problem situation
you were trying to address. In other words, was your strategy useful? Did ensuring that
teachers were better qualified improve the pass rate in the final year of school? Before
you decide to get bigger, or to replicate the project elsewhere, you need to be sure that what
you are doing makes sense in terms of the impact you want to achieve.

Need Of Monitoring & Evaluation

Monitoring and evaluation enable you to check the “bottom line” of development work:
Not “are we making a profit?” but “are we making a difference?” Through
monitoring and evaluation, you can:

Prepared by Lt Col ( R) Khalid Hussain Chohan, M&E Expert

Public Sector Capacity Building Project in AJK
Monitoring & Evaluation Officer’s Handbook 3
Government of AJK, Planning & Development Department
• Review progress;
• Identify problems in planning and/or implementation;
• Make adjustments so that you are more likely to “make a difference”.

In many organizations, “monitoring and evaluation” is something that that is seen as a

donor requirement rather than a management tool. Donors are certainly entitled to know
whether their money is being properly spent, and whether it is being well spent. But the
primary (most important) use of monitoring and evaluation should be for the organization
or project itself to see how it is doing against objectives, whether it is having an impact,
whether it is working efficiently, and to learn how to do it better.

Plans are essential but they are not set in concrete (totally fixed). If they are not working,
or if the circumstances change, then plans need to change too. Monitoring and evaluation
are both tools which help a project or organization know when plans are not working, and
when circumstances have changed. They give management the information it needs to
make decisions about the project or organization, about changes that are necessary in
strategy or plans. Through this, the constants remain the pillars of the strategic
framework: the problem analysis, the vision, and the values of the project or organization.
Everything else is negotiable. Getting something wrong is not a crime but failing to learn
from past mistakes because you are not monitoring and evaluating, is. It is important to
recognize that monitoring and evaluation are not magic wands that can be waved to
make problems disappear, or to cure them, or to miraculously make changes without a lot
of hard work being put in by the project or organization. In themselves, they are not a
solution, but they are valuable tools. Monitoring and evaluation can:

• Help you identify problems and their causes;

• Suggest possible solutions to problems;
• Raise questions about assumptions and
strategy;
• Push you to reflect on where you are
going and how you are getting there;
• Provide you with information and
insight;
• Encourage you to act on the information
and insight;
• Increase the likelihood that you will
make a positive development difference.

The effect of monitoring and evaluation can be

seen in the following cycle. Note that you will
monitor and adjust several times before you are
ready to evaluate and replan.

Prepared by Lt Col ( R) Khalid Hussain Chohan, M&E Expert

Public Sector Capacity Building Project in AJK
Monitoring & Evaluation Officer’s Handbook 4
Government of AJK, Planning & Development Department
EVALUATION Monitoring involves:
• Establishing indicators of efficiency, effectiveness and impact;
• Setting up systems to collect information relating to these indicators;
• Collecting and recording the information;
• Analyzing the information;
• Using the information to inform day-to-day management.
Monitoring is an internal function in any project or organization.

Evaluation involves:
• Looking at what the project or organization intended to achieve – what difference
did it want to make? What impact did it want to make?
• Assessing its progress towards what it wanted to achieve, its impact targets.
• Looking at the strategy of the project or organization. Did it have a strategy? Was
it effective in following its strategy? Did the strategy work? If not, why not?
• Looking at how it worked. Was there an efficient use of resources? What were
the opportunity costs of the way it chose to work? How sustainable is the way in which
the project or organization works? What are the implications for the various
stakeholders in the way the organization works?

In an evaluation, we look at efficiency, effectiveness and impact.

There are many different ways of doing an evaluation. Some of the more common
terms you may have come across are:

• Self-evaluation: This involves an organization or project holding up a mirror

to itself and assessing how it is doing, as a way of learning and improving practice. It
takes a very self-reflective and honest organization to do this effectively, but it can be an
important learning experience.
• Participatory evaluation: This is a form of internal evaluation. The
intention is to involve as many people with a direct stake in the work as possible. This
may mean project staff and beneficiaries working together on the evaluation. If an
outsider is called in, it is to act as a facilitator of the process, not an evaluator.
• Rapid Participatory Appraisal: Originally used in rural areas, the same
methodology can, in fact, be applied in most communities. This is a qualitative way of
doing evaluations. It is semi-structured and carried out by an interdisciplinary team over
a short time. It is used as a starting point for understanding a local situation and is a
quick, cheap, useful way to gather information. It involves the use of secondary data
review, direct observation, semi-structured interviews, key informants, group interviews,
games, diagrams, maps and calendars. In an evaluation context, it allows one to get
valuable input from those who are supposed to be benefiting from the development work.
It is flexible and interactive.
• External evaluation: This is an evaluation done by a carefully chosen
outsider or outsider team.
• Interactive evaluation: This involves a very active interaction between an
outside evaluator or evaluation team and the organization or project being evaluated.

Prepared by Lt Col ( R) Khalid Hussain Chohan, M&E Expert

Public Sector Capacity Building Project in AJK
Monitoring & Evaluation Officer’s Handbook 5
Government of AJK, Planning & Development Department
Sometimes an insider may be included in the evaluation team.

INTERNAL VS EXTERNAL EVALUATIONS

Advantages Disadvantages
Internal Evaluation
The evaluation team may have a vested
The evaluators are very familiar with the work, interest in reaching positive conclusions about
the organizational culture and the aims and the work or organization. For this reason,
objectives. other stakeholders, such as donors, may prefer
an external evaluation.

Sometimes people are more willing to speak to The team may not be specifically skilled or
insiders than to outsiders. trained in evaluation.

An internal evaluation is very clearly a

management tool, a way of self-correcting, The evaluation will take up a considerable
and much less threatening than an external amount of organizational time.
evaluation. This may make it easier for those
involved to accept findings and criticisms.

An internal evaluation will cost less than an It may cost less than an external evaluation; the
external evaluation. opportunity costs may be high.
External evaluation (done by a team or person with no vested interest in the project)

The evaluation is likely to be more objective
as the evaluators will have some distance from
the work.
The evaluators should have a range of
evaluation skills and experience.
Someone from outside the organization or
project may not understand the culture or even
what the work is trying to achieve
Those directly involved may feel threatened by
outsiders and be less likely to talk openly and co-
operate in the process.

Sometimes people are more willing to speak External evaluation can be very costly.
to outsiders than to insiders.

Using an outside evaluator gives greater An external evaluator may misunderstand

credibility to findings, particularly positive what you want from the evaluation and not
findings. give you what you need

Prepared by Lt Col ( R) Khalid Hussain Chohan, M&E Expert

Public Sector Capacity Building Project in AJK
Selecting An External Evaluator or Evaluation Team
Qualities to look for in an external evaluator or evaluation team:

• An understanding of development issues.

• An understanding of organizational issues.

• Experience in evaluating development projects, programs or organizations.
• A good track record with previous clients.
• Research skills.
• A commitment to quality.

• A commitment to deadlines.
• Objectivity, honesty and fairness.
• Logic and the ability to operate systematically.
• Ability to communicate verbally and in writing.
• A style and approach that fits with your organization.

• Values that are compatible with those of the organization.

• Reasonable rates (fees), measured against the going rates.
When you decide to use an external Evaluator:
• Check his/her/their references.
• Meet with the evaluators before making a final decision.
• Communicate what you want clearly – good Terms of Reference
• Terms) are the foundation of a good contractual relationship.

• Negotiate a contract which makes provision for what will happen if output
expectations are not met.
• Ask for a work plan with outputs and timelines.
• Maintain contact – ask for interim reports as part of the contract
• Build in formal feedback times.

Do not expect any evaluator to be completely objective. S/he will have opinions and
ideas – you are not looking for someone who is a blank page! However, his/her
opinions must be clearly stated as such, and must not be disguised as “facts”. It is also
useful to have some idea of his/ her (or their) approach to evaluation.
DIFFERENT APPROACHES TO EVALUATION

Approach Major purpose Typical focus Likely

questions methodology
Comparing baseline
Goal-based Assessing Were the goals (see Glossary of
achievement of goals achieved?
Terms) and progress
and objectives.
data (see Glossary of
Efficiently? Terms); finding ways
Were they the right to
measure indicators.
Assessing range of
Providing options related to the
Decision Making
information. Is the project project context
effective? Should it inputs, process, and
continue? How might product. Establishing
it be modified? some kind of
decision-making
consensus.

Independent
Goal-free Assessing the full
determination of
range of project
needs and standards
effects, intended and What are all the
to judge project
unintended. outcomes? What
worth. Qualitative
value do they have?
and quantitative
techniques to uncover
any possible results.

Critical review based

Expert judgement Use of expertise. How does an outside on experience,
professional rate this informal surveying,
project? and subjective
insights.

A combination of all these approaches is recommended as the best option. However

an organization can ask for a particular emphasis but should not exclude findings
that make use of a different approach
 CHAPTER-II
PLANNING FOR MONITORING AND EVALUATION

Monitoring and evaluation should be part of your planning process. It is very difficult
to go back and set up monitoring and evaluation systems once things have begun to
happen. You need to begin gathering information about performance and in relation to
targets from the word go. The first information gathering should, in fact, take place
when you do your needs assessment (see the toolkit on overview of planning, the
section on doing the ground work). This will give you the information you need against
which to assess improvements over time. When you do your planning process, you
will set indicators (see Glossary of Terms). These indicators provide the framework
for your monitoring and evaluation system. They tell you what you want to know and
the kinds of information it will be useful to collect. In this section we look at:

• What do we want to know? This includes looking at indicators for both

internal issues and external issues.
• Different kinds of information.
• How will we get information?
• Who should be involved?

There is not one set way of planning for monitoring and evaluation. The ideas
included in the toolkits on overview of planning, strategic planning and action
planning will help you to develop a useful framework for your monitoring and
evaluation system. If you are familiar with logical framework analysis and already use
it in your planning, this approach lends itself well to planning a monitoring and
evaluation system.
WHAT DO WE WANT TO KNOW?
What we want to know is linked to what we think is important. In development
work, what we think is important is linked to our values.

Most work in civil society organizations is underpinned by a value framework. It

is this framework that determines the standards of acceptability in the work we do.
The central values on which most development work is built are:

• Serving the disadvantaged;

• Empowering the disadvantaged;
• Changing society, not just helping individuals;
• Sustainability;
• Efficient use of resources.
So, the first thing we need to know is: Is what we are doing and how we are doing it
meeting the requirements of these values? In order to answer this question, our
monitoring and evaluation system must give us information about:

• Who is benefiting from what we do? How much are they benefiting?
• Are beneficiaries passive recipients or does the process enable them to have
some control over their lives?
• Are there lessons in what we are doing that have a broader impact than just
what is happening on our project?
• Can what we are doing be sustained in some way for the long-term, or will the
impact of our work cease when we leave?
• Are we getting optimum outputs for the least possible amount of inputs?

Do we want to know about the process or the product?

Should development work be evaluated in terms of the process (the way in which the
work is done) or the product (what the work produces)? Often, this debate is more
about excusing inadequate performance than it is about a real issue. Process and
product are not separate in development work. What we achieve and how we achieve
it are often the very same thing. If the goal is development, based on development
values, then sinking a well without the transfer of skills for maintaining and managing
the well is not enough. Saying: “It was taking too long that way. We couldn’t wait for
them to sort themselves out. We said we’d sink a well and we did” is not enough. But
neither is: “It doesn’t matter that the well hasn’t happened yet. What’s important is
that the people have been empowered.”

Both process and product should be part of your monitoring and evaluation system.

But how do we make process and product and values measurable? The answer lies in
the setting of indicators and this is dealt with in the sub-section that follows.

What Do You Want To Know?

Indicators
Indicators are also dealt with in overview of planning, in the section on monitoring
and evaluation. Indicators are measurable or tangible signs that something has been
done or that something has been achieved. In some studies, for example, an increased
number of television aerials in a community has been used as an indicator that the
standard of living in that community has improved. An indicator of community
empowerment might be an increased frequency of community members speaking at
community meetings. If one were interested in the gender impact of, for example,
drilling a well in a village, then you could use “increased time for involvement in
development projects available to women” as an indicator. Common indicators for
something like overall health in a community are the infant/child/maternal mortality
rate, the birth rate, and nutritional status and birth weights. You could also look at
less direct indicators such as the extent of immunization, the extent of potable
(drinkable) water available and so on.
Indicators are an essential part of a monitoring and evaluation system because they
are what you measure and/or monitor. Through the indicators you can ask and
answer questions such as:

• Who?
• How many?
• How often?
• How much?

But you need to decide early on what your indicators are going to be so that you can
begin collecting the information immediately. You cannot use the number of television
aerials in a community as a sign of improved standard of living if you don’t know how
many there were at the beginning of the process. Some people argue that the problem
with measuring indicators is that other variables (or factors) may have impacted on
them as well. Community members may be participating more in meetings because a
number of new people with activist backgrounds have come to live in the area. Women
may have more time for development projects because the men of the village have
been attending a gender workshop and have made a decision to share the traditionally
female tasks. And so on. While this may be true, within a project it is possible to
identify other variables and take them into account. It is also important to note that,
if nothing is changing, if there is no improvement in the measurement of the key
indicators identified, then your strategy is not working and needs to be rethought.
DEVELOPING INDICATORS

Step 1: Identify the problem situation you are trying to address. The following
might be problems:

• Economic situation (unemployment, low incomes etc)

• Social situation (housing, health, education etc)

• Cultural or religious situation (not using traditional languages, low
attendance at religious services etc)
• Political or organizational situation (ineffective local government, faction
fighting etc)

Step 2: Develop a vision for how you would like the problem areas to be/ look.
This will give you impact indicators.

What will tell you that the vision has been achieved? What signs will you see that you
can measure that will “prove” that the vision has been achieved? For example, if your
vision was that the people in your community would be healthy, then you can use
health indicators to measure how well you are doing. Has the infant mortality rate
gone down? Do fewer women die during child-birth? Has the HIV/AIDS infection
rate been reduced? If you can answer “yes” to these questions then progress is being
made.

Step 3: Develop a process vision for how you want things to be achieved. This will
give you process indicators.

If, for example, you want success to be achieved through community efforts and
participation, then your process vision might include things like community health
workers from the community trained and offering a competent service used by all;
community organizes clean-up events on a regular basis, and so on.

Step 4: Develop indicators for effectiveness.

For example, if you believe that you can increase the secondary school pass rate by
upgrading teachers, then you need indicators that show you have been effective in
upgrading the teachers e.g. evidence from a survey in the schools, compared with a
baseline survey.

Step 5: Develop indicators for your efficiency targets.

Here you can set indicators such as: planned workshops are run within the stated
timeframe, costs for workshops are kept to a maximum of US$ 2.50 per participant, no
more than 160 hours in total of staff time to be spent on organizing a conference; no
complaints about conference organization etc.

With this framework in place, you are in a position to monitor and evaluate
efficiency, effectiveness and impact.
DIFFERENT KINDS OF INFORMATION
(QUANTITATIVE AND QUALITATIVE)
Information used in monitoring and evaluation can be classified as:

• Quantitative
• Qualitative

Quantitative measurement tells you “how much or how many”. How many people
attended a workshop, how many people passed their final examinations, how much a
publication cost, how many people were infected with HIV, how far people have to
walk to get water or firewood, and so on. Quantitative measurement can be expressed
in absolute numbers (3 241 women in the sample are infected) or as a percentage
(50% of households in the area have television aerials). It can also be expressed as a
ratio (one doctor for every 30 000 people). One way or another, you get quantitative
(number) information by counting or measuring.

Qualitative measurement tells you how people feel about a situation or about how
things are done or how people behave. So, for example, although you might discover
that 50% of the teachers in a school are unhappy about the assessment criteria used,
this is still qualitative information, not quantitative information. You get qualitative
information by asking, observing, interpreting.

Some people find quantitative information comforting – it seems solid and reliable
and “objective”. They find qualitative information unconvincing and “subjective”. It is
a mistake to say that “quantitative information speaks for itself”. It requires just as
much interpretation in order to make it meaningful as does qualitative information. It
may be a “fact” that enrolment of girls at schools in some developing countries is
dropping – counting can tell us that, but it tells us nothing about why this drop is taking
place. In order to know that, you would need to go out and ask questions – to get
qualitative information. Choice of indicators is also subjective, whether you use
quantitative or qualitative methods to do the actual measuring. Researchers choose to
measure school enrolment figures for girls because they believe that this tells them
something about how women in a society are treated or viewed.

The monitoring and evaluation process requires a combination of quantitative and

qualitative information in order to be comprehensive. For example, we need to know
what the school enrolment figures for girls are, as well as why parents do or do not
send their children to school. Perhaps enrolment figures are higher for boys than for
girls because a particular community sees schooling as a luxury and prefers to train
boys to do traditional and practical tasks such taking care of animals. In this case, the
higher enrolment of girls does not necessarily indicate higher regard for girls.
HOW WILL WE GET INFORMATION?
This is dealt with in some detail in the toolkit on action planning, in the section on
monitoring, collecting information as you go along. Your methods for information
collecting need to be built into your action planning. You should be aiming to have a
steady stream of information flowing into the project or organisation about the work
and how it is done, without overloading anyone. The information you collect must
mean something: don’t collect information to keep busy, only do it to find out what
you want to know, and then make sure that you store the information in such a way
that it is easy to access.

Usually you can use the reports, minutes, attendance registers, financial statements that
are part of your work anyway as a source of monitoring and evaluation information.

However, sometimes you need to use special tools that are simple but useful to add to
the basic information collected in the natural course of your work. Some of the more
common ones are:

• Case studies
• Recorded observation
• Diaries

• Recording and analysis of important incidents (called “critical incident

analysis”)
• Structured questionnaires
• One-on-one interviews
• Focus groups
• Sample surveys

• Systematic review of relevant official statistics.

WHO SHOULD BE INVOLVED?

Almost everyone in the organization or project will be involved in some way in
collecting information that can be used in monitoring and evaluation. This
includes:

• The administrator who takes minutes at a meeting or prepares and

circulates the attendance register;
• The fieldworkers who writes reports on visits to the field;
• The bookkeeper who records income and expenditure.
In order to maximize their efforts, the project or organization needs to:

• Prepare reporting formats that include measurement, either quantitative or

qualitative, of important indicators. For example, if you want to know about
community participation in activities, or women’s participation specifically, structure
the fieldworkers reporting format so that s/he has to comment on this, backing up
observations with facts. (Look at the fieldworker report format given later in this
toolkit.)
• Prepare recording formats that include measurement, either quantitative or
qualitative, of important indicators. For example, if you want to know how many men
and how many women attended a meeting, include a gender column on your
attendance list.
• Record information in such a way that it is possible to work out what you
need to know. For example, if you need to know whether a project is sustainable
financially, and which elements of it cost the most, then make sure that your
bookkeeping records reflect the relevant information.

It is a useful principle to look at every activity and say: What do we need to know
about this activity, both process (how it is being done) and product (what it is meant
to achieve), and what is the easiest way to find it out and record it as we go along?
 CHAPTER-III
DESIGNING A MONITORING AND/OR EVALUATION PROCESS

As there are differences between the design of a monitoring system and that of an
evaluation process, we deal with them separately here.

Under monitoring we look at the process an organization could go through to design a

monitoring system.

Under evaluation we look at:

• Purpose
• Key evaluation questions
• Methodology.
MONITORING

When you design a monitoring system, you are taking a formative view point and
establishing a system that will provide useful information on an ongoing basis so that
you can improve what you do and how you do it. On the next page, you will find a
suggested process for designing a monitoring system. For a case study of how an
organization went about designing a monitoring system, go to the section with examples,
and the example given of designing a monitoring system.

DESIGNING A MONITORING SYSTEM

Below is a step-by-step process you could use in order to design a monitoring
system for your organization or project.

For a case study of how an organization went about designing a monitoring system,
go to examples.

Step 1: At a workshop with appropriate staff and/or volunteers, and run by you
or a consultant:Introduce the concepts of efficiency, effectiveness and
impact.
• Explain that a monitoring system needs to cover all three.
• Generate a list of indicators for each of the three aspects.
• Clarify what variables need to be linked. So, for example, do you
want to be able to link the age of a teacher with his/her qualifications in order to answer
the question: Are older teachers more or less likely to have higher qualifications?
• Clarify what information the project or organization is already
collecting.
Step 2: Turn the input from the workshop into a brief for the questions your
monitoring system must be able to answer. Depending on how complex
your requirements are, and what your capacity is, you may decide to go
for a computerized data base or a manual one. If you want to be able to
link many variables across many cases (e.g. participants, schools, parent
involvement, resources, urban/rural etc), you may need to go the computer
route. If you have a few variables, you can probably do it manually. The
important thing is to begin by knowing what variables you are interested
in and to keep data on these variables. Linking and analysis can take place
later.

From the workshop you will know what you want to monitor. You will
have the indicators of efficiency, effectiveness and impact that have
been prioritized. You will then choose the variables that will help you
answer the questions you think are important.

So, for example, you might have an indicator of impact which is that
“safer sex options are chosen” as an indicator that “young people are
now making informed and mature lifestyle choices”. The variables that
might affect the indicator include:

• Age
• Gender

• Religion
• Urban/rural
• Economic category
• Family environment
• Length of exposure to your project’s initiative

• Number of workshops attended.

By keeping the right information you will be able to answer questions
such as:

• Does age make a difference to the way our message is received?

• Does economic category i.e. do young people in richer areas respond

better or worse to the message or does it make no difference?
• Does the number of workshops attended make a difference to the
impact?
 Answers to these kinds of questions enable a project or organization to
make decisions about what they do and how they do it, to make informed
changes to programs, and to measure their impact and effectiveness.
Answers to questions such as:

• Do more people attend sessions that are organized well in advance?

• Do more schools participate when there is no charge?

• Do more young people attend when sessions are over weekends or in

the evenings?
• Does it cost less to run a workshop in the community, or to bring
people to our training centre to run the workshop?

Step 3: Decide how you will collect the information you need (see collecting
information) and where it will be kept (on computer, in manual files).

Step 4: Decide how often you will analyze the information – this means
putting it together and trying to answer the questions you think are
important.

Step 5: Collect, analyze, report.

EVALUATION
Designing an evaluation process means being able to develop Terms of Reference for
such a process (if you are the project or organization) or being able to draw up a
sensible proposal to meet the needs of the project or organization (if you are a
consultant).

The main sections in Terms of Reference for an evaluation process usually include:

• Background: This is background to the project or organization, something

about the problem identified, what you do, how long you have existed, why you have
decided to do an evaluation.

• Purpose: Here you would say what it is the organization or project

wants the evaluation to achieve.

• Key evaluation questions: What the central questions are that the
evaluation must address.

• Specific objectives: What specific areas, internal and/or external, you want
the evaluation to address. So, for example, you might want the evaluation to include a
review of finances, or to include certain specific program sites.

• Methodology: here you might give broad parameters of the kind of approach
you favor in evaluation (see the section on more about monitoring and evaluation).
You might also suggest the kinds of techniques you would like the evaluation team to
use.

• Logistical issues: These would include timing, costing, requirements of team

composition and so on.

Purpose

The purpose of an evaluation is the reason why you are doing it. It goes beyond what you
want to know to why you want to know it. It is usually a sentence or, at most, a
paragraph. It has two parts:

• What you want evaluated;

• To what end you want it done.

Examples of an evaluation purpose could be:

• To provide the organization with information needed to make decisions

about the future of the project.
• To assess whether the organization/ project is having the planned impact
in order to decide whether or not to replicate the model elsewhere.
• To assess the program in terms of effectiveness, impact on the target
group, efficiency and sustainability in order to improve its functioning.

The purpose gives some focus to the broad evaluation process.

Key Evaluation Questions

The key evaluation questions are the central questions you want the evaluation process
to answer. They are not simple questions. You can seldom answer “yes” or “no”
them. A useful evaluation question is:

• Thought provoking

• Challenges assumptions.
• Focuses inquiry and reflection.
• Raises many additional questions.
Some examples of key evaluation questions related to a project purpose:

The purpose of the evaluation is to assess how efficient the project is in delivering
benefits to the identified community in order to inform Board decisions about continuity
and replicability.

Key evaluation questions:

• Who is currently benefiting from the project and in what ways?

• Do the inputs (in money and time) justify the outputs and, if so/if not, on what
basis is this claim justified?
• What would improve the efficiency, effectiveness and impact of the current
project?
• What are the lessons that can be learned from this project in terms of
replicability?

Note that none of these questions deals with a specific element or area of the internal or
external functioning of the project or organization. Most would require the evaluation
team to deal with a range of project or organizational elements in order to answer them.

Other examples of evaluation questions might be:

• What are the most effective ways in which a project of this kind can
address the problem identified?
• To what extent does the internal functioning and structure of the organization
impact positively on the program work?
• What learning from this project would have applicability across the full
development spectrum?

Clearly, there could be many, many examples. Our experience has shown us that,
when an evaluation process is designed with such questions in mind, it produces far
more interesting insights than simply impact are we having?

Methodology of Evaluation

“Methodology” as opposed to “methods” deals more with the kind of approach you
use in your evaluation process. (See also more about monitoring and evaluation earlier
in the toolkit). You could, for example, commission or do an evaluation process that
looked almost entirely at written sources, primary or secondary: reports, data sheets,
minutes and so on. Or you could ask for an evaluation process that involved getting
input from all the key stakeholder groups. Most terms of reference will ask for some
combination of these but they may also specify how they want the evaluation team to
get input from stakeholder groups for example:

• Through a survey;

• Through key informants;

• Through focus groups.

Here too one would expect to find some indication of reporting formats: Will all
reporting be written? Will the team report to management, or to all staff, or to staff
and Board and beneficiaries? Will there be interim reports or only a final report? What
sort of evidence does the organization or project require to back up evaluator opinions?
Who will be involved in analysis?

The methodology section of Terms of Reference should provide a broad framework for
how the project or organization wants the work of the evaluation done.
 CHAPTER-IV
COLLECTING INFORMATION
(This is also dealt with in the toolkit on action planning, in the section on monitoring,
collecting information as you go along.)

Here we look in detail at:

• Baselines and damage control;

• Methods.

By damage control we mean what you need to do if you failed to get baseline
information when you started out.

BASELINES AND DAMAGE CONTROL

Ideally, if you have done your planning well and collected information about the
situation at the beginning of your intervention, you will have baseline data.

Baseline data is the information you have about the situation before you do anything.
It is the information on which your problem analysis is based. It is very difficult to
measure the impact of your initiative if you do not know what the situation was when
you began it. (See also the toolkit on overview of planning, the section on doing the
ground work.) You need baseline data that is relevant to the indicators you have
decided will help you measure the impact of your work.

Different Levels of Baseline Data:

• General information about the situation, often available in official statistics

e.g. infant mortality rates, school enrolment by gender, unemployment rates, literacy
rates and so on. If you are working in a particular geographical area, then you need
information for that area. If it is not available in official statistics, you may need to do
some information gathering yourselves. This might involve house-to-house surveying,
either comprehensively or using sampling (see the section after this on methods), or
visiting schools, hospitals etc. Focus on your indicators of impact when you collect this
information.

• If you have decided to measure impact through a sample of people or

families with whom you are working, you will need specific information about those
people or families. So, for example, for families (or business enterprises or schools or
whatever units you are working with) you may want specific information about
income, history, number of people employed, number of children per classroom and so
on. You will probably get this information from a combination of interviewing and
filling in of basic questionnaires. Again, remember to focus on the indicators which
you have decided are important for your work.

• If you are working with individuals, then you need “intake” information –
documented information about their situation at the time you began working with
them. For example, you might want to know, in addition to age, gender, name and so
on, current income, employment status, current levels of education, amount of money
spent on leisure activities, amount of time spent on leisure activities, ambitions and so
on, for each individual participant. Again, you will probably get the information from
a combination of interviewing and filling in of basic questionnaires, and you should
focus on the indicators which you think are important.

It is very difficult to go back and get this kind of baseline information after you have
begun work and the situation has changed. But what if you didn’t collect this
information at the beginning of the process? There are ways of doing damage
control. You can get anecdotal information (see Glossary of Terms) from those who
were involved at the beginning and you can ask participants if they remember what
the situation was when the project began. You may not even have decided what your
important indicators are when you began your work. You will have to work it out
“backwards”, and then try to get information about the situation related to those
indicators when you started out. You can speak to people, look at records and other
written sources such as minutes, reports and so on. One useful way of making
meaningful comparisons where you do not have baseline information is through
using control groups. Control groups are groups of people, businesses, families or
whatever unit you are focusing on, that has not had input from your project or
organization but are, in most other ways, very similar to those you are working with.

For example: You have been working with groups of school children around the
country in order to build their self-esteem and knowledge as a way of combating the
spread of HIV/AIDS and preventing teenage pregnancies. After a few years, you want
to measure what impact you have had on these children. You are going to run a series
of focus groups (see methods) with the children at the schools where you have
worked. But you did not do any baseline study with them. How will you know
what difference you have made?

You could set up a control groups at schools in the same areas, with the same kinds of
profiles, where you have not worked. By asking both the children at those schools you
have worked at, and the children at the schools where you have not worked, the same
sorts of questions about self-esteem, sexual behavior and so on, you should be able to
tell whether or not your work has made any difference. When you set up control
groups, you should try to ensure that:

• The profiles of the control groups are very similar to those of the groups you
have worked with. For example, it might be schools that serve the same economic
group, in the same geographical area, with the same gender ratio, age groups, ethnic
or racial mix.

• There are no other very clear variables that could affect the findings or
comparisons. For example, if another project, doing similar work, has been involved
with the school, this school would not be a good place to establish a control group. You
want a situation as close to what the situation was,with the beneficiaries of your
project when you started out.

METHODS
In this section we are going to give you a “shopping list” of the different kinds of
methods that can be used to collect information for monitoring and evaluation
purposes. You need to select methods that suit your purposes and your resources. Do
not plan to do a comprehensive survey of 100 000 households if you have two weeks
and very little money! Use sampling in this case.

Sampling is another important concept when using various tools for a monitoring or
evaluation process. Sampling is not really a tool in itself, but used with other tools it
is very useful. Sampling answers the question: Who do we survey, interview, include
in a focus group etc? It is a way of narrowing down the number of possible
respondents to make it manageable and affordable. Sometimes it is necessary to be
comprehensive. This means getting to every possible household, or school or teacher
or clinic etc. In an evaluation, you might well use all the information collected in
every case during the monitoring process in an overall analysis. Usually, however,
unless numbers are very small, for in-depth exploration you will use a sample.
Sampling techniques include:

• Random sampling (In theory random sampling means doing the sampling on a
sort of lottery basis where, for example all the names go into a container, are
tumbled around and then the required number are drawn out. This sort of
random sampling is very difficult to use in the kind of work we are talking
about. For practical purposes you are more likely to, for example, select every
seventh household or every third person on the list. The idea is that there is no
bias in the selection.)

• Stratified sampling (e.g. every seventh household in the upper income bracket,
every third household in the lower income bracket)

• Cluster sampling (e.g. only those people who have been on the project for at
least two years).

It is also usually best to use triangulation (See Glossary of Terms). This is a fancy
word that means that one set of data or information is confirmed by another. You
usually look for confirmation from a number of sources saying the same thing.
Tool Description Usefulness Disadvantages
Interviews
These can be Can be used with almost
structured, anyone who has some
semi-structured or involvement with the
unstructured. project. Requires some skill in
the interviewer.
They involve asking
specific questions Can be done in person or
aimed at getting on the telephone or even
information that will by e-mail.
enable indicators to
be measured.
Questions can be Very flexible
open-ended or
closed (yes/no
answers).
 Can be a source of
qualitative and
quantitative
information.

Tool Description Usefulness Disadvantages

Needs a skilled
As these key informants
interviewer with a
These are interviews often have little to do good
that with the project or
understanding of the
Key informant are carried out with organization, they can be topic. Be careful not
Interviews specialists in a topic quite objective and offer to
or useful insights. They can
turn something into
someone who may provide something of the an
be able to shed a “big picture” where
absolute truth (cannot
particular light on people more involved
be challenged)
the process. may focus
because it has been
at the micro (small)
said by a key
level.
informant.
 With people who do
not read and write,
someone has to go
through the
questionnaire with
them which means no
time is saved and the
numbers one can
reach are limited.
This tool can save lots of
With questionnaires,
time if it is
These are written it is not possible to
self-completing, enabling
questions that are explore what people
you to get to many
used to get written are saying any
people. Done in this way
Questionnaires responses which, further.
it gives people a feeling
when analysed, will
of anonymity and theyQuestionnaires are
enable indicators to
may say things theyalso over-used and
be measured.
would not say to anpeople get tired of
interviewer. completing them.
Questionnaires must
be piloted to ensure
that questions can be
understood and cannot
be misunderstood. If
the questionnaire is
complex and will need
computerised analysis,
you need expert help
in
Tool Description Usefulness Disadvantages
 It is quite difficult to
do random sampling
for focus groups and
this means findings
may not be
generalized.
In a focus group, a Sometimes people
group of about six to influence one another
12 people are either to say
interviewed together something or to keep
by a skilledThis can be a useful quiet about something.
interviewer/ way of getting opinions If possible, focus
Focus Group facilitator with afrom quite a large groups interviews
carefully structuredsample of people. should be recorded
interview schedule. and then transcribed.
Questions are Difficult to facilitate –
usually focused requires a very
around a specific experienced
topic or issue. facilitator. May
require breaking into
small groups followed
by plenary sessions
when everyone comes
together again.

This involves a
Community meetings are
gathering of a fairly
useful for getting a broad
large group of
response from many
beneficiaries to
Community people on specific issues.
whom questions,
meetings It is also a way of
problems, situations
involving beneficiariesRelies on field
are put for input to
directly in an evaluationworkers being
help in measuring
process, giving them adisciplined and
indicators.
sense of ownership of theinsightful.
process. They are useful
to have at critical points
in community projects.

Tool Description Usefulness Disadvantages

 Structured report
forms that ensure
Field Worker
that indicator-related
Report
questions are askedFlexible, an extension of
and answersnormal work, so cheap
recorded, andand not time-consuming.
observations
recorded on every
visit.

This involves It can be used with Ranking is quite a

getting people to say individuals and groups, difficult concept to
what they think is as part of an interview get across and
Ranking requires very careful
most useful, most schedule or
important, least questionnaire, or as a explanation as well as
useful etc. separate session. Where testing to ensure that
people cannot read and people understand
write, pictures can be what you are asking.
used. If they
misunderstand, your
data can be
completely distorted.

Visual/audio
stimuli These include Very useful to use You have to have
pictures, movies, together with other tools, appropriate stimuli
tapes, stories, role particularly with people and the facilitator
plays, who cannot read or needs to be skilled in
photographs, used write. using such stimuli.
to illustrate
problems or issues
or past events or
even future events.

Tool Description Usefulness Disadvantages

Rating Scale This technique
makes use of a
continuum, along
which people are
You need to test the
expected to place
statements very
their own feelings,
carefully to make
observations etc. sure that there is no
People are usually possibility of
asked to say misunderstanding. A
whether they agree It is useful to measure
attitudes, opinions, common problem is
strongly, agree, when two concepts
don’t know, perceptions.
are included in the
disagree, disagree statement and you
strongly with a cannot be sure
statement. You can whether an opinion is
use pictures and being given on one or
symbols in this the other or both.
technique if people
cannot read and
write.

Very useful when

something
focusing problematic has
Critical event/ interviews with occurred and people
incident individuals or feel strongly about it.
Analysis groups on If all those involved
particular events or are included, it should
incidents. The help the evaluation
purpose of doing team to get a picture
this is to get a very that is reasonably
full picture of what close to what actually
actually happened. happened and to be
able to diagnose what
went wrong.
The evaluation team
can end up
submerged in a vast
amount of
contradictory detail
and lots of “he
said/she said”. It can
be difficult not to
take sides and to
remain objective.

Tool Description Usefulness Disadvantages

 This involves direct
observation of
Participant
events, processes,
Observation It is difficult to
relationships and can be a useful way of
behaviours. observe and
“
confirming, or otherwise, participate. The
Participant” here information provided in
implies that the process is very
other ways. time-consuming.
observer gets
involved in
activities
rather than
maintaining a
distance.

This involves
getting participants Can be very useful,
Self-drawings
to draw pictures, particularly with younger
usually of how children.
they feel or think
about something. Can be difficult to
explain and
interpret.
INTERVIEWING SKILLS
Some do’s and don’ts for interviewing:
• DO test the interview schedule beforehand for clarity, and to make sure questions
cannot be misunderstood.
• DO state clearly what the purpose of the interview is.
• DO assure the interviewee that what is said will be treated in confidence.
• DO ask if the interviewee minds if you take notes or tape record the interview.
• DO record the exact words of the interviewee as far as possible.
• DO keep talking as you write.
• DO keep the interview to the point.
• DO cover the full schedule of questions.
• DO watch for answers that are vague and probe for more information.
• DO be flexible and note down everything interesting that is said, even if it isn’t
on the schedule.
• DON’T offend the interviewee in any way.
• DON’T say things that are judgmental.
• DON’T interrupt in mid-sentence.
• DON’T put words into the interviewee’s mouth.
• DON’T show what you are thinking through changed tone of voice.
 CHAPTER-V
ANALYSING INFORMATION

Whether you are looking at monitoring or evaluation, at some point you are going to
find yourself with a large amount of information and you will have to decide how to
make sense of it or to analyze it. If you are using an external evaluation team, it will be
up to this team to do the analysis, but, sometimes in evaluation, and certainly in
monitoring, you, the organization or project, have to do the analysis.

Analysis is the process of turning the detailed information into an understanding of

patterns, trends, interpretations. The starting point for analysis in a project or
organizational context is quite often very unscientific. It is your intuitive
understanding of the key themes that come out of the information gathering process.
Once you have the key themes, it becomes possible to work through the information,
structuring and organizing it. The next step is to write up your analysis of the findings
as a basis for reaching conclusions, and making recommendations.

So, your process looks something like this:

Taking action

Monitoring and evaluation have little value if the organisation or project does not act
on the information that comes out of the analysis of data collected. Once you have the
findings, conclusions and recommendations from your monitoring and evaluation
process, you need to:

• Report to your stakeholders;

• Learn from the overall process;
• Make effective decisions about how to move forward; and, if necessary,
• Deal with resistance to the necessary changes within the organization or
project, or even among other stakeholders.

REPORTING
Whether you are monitoring or evaluating, at some point, or points, there will be a
reporting process. This reporting process follows the stage of analysing information.
You will report to different stakeholders in different ways, sometimes in written form,
sometimes verbally and, increasingly, making use of tools such as PowerPoint
presentations, slides and videos.
Below is a table, suggesting different reporting mechanisms that might be
appropriate for different stakeholders and at different times in project cycles. For
writing tips, go to the toolkit on effective writing for organizations.

Target group Stage of project cycle Appropriate format

Interim, based on Written report

Board monitoring analysis

Evaluation Written report, with an Executive

Summary, and verbal presentation
from the evaluation team.

Interim, based on Written report, discussed at

Management Team monitoring analysis management team meeting.
Evaluation Written report, presented verbally by
the evaluation team.
Interim, based on Written and verbal presentation at
Staff monitoring departmental and team levels.
Evaluation
Written report, presented verbally by
evaluation team and followed by in-depth
discussion of relevant recommendations at
departmental and team levels.
Beneficiaries Interim, but only at Verbal presentation, backed up by
significant points, and summarized document, using appropriate
evaluation tables,charts, visuals and audio-visuals.
This is particularly important if the
organization or project is
contemplating a major change that will
impact on beneficiaries.
Donors Interim, based on
Summarized in a written report.
monitoring
Evaluation Fullwritten report with
executive summary or a special
version, focused on donor concerns and
interests.
Evaluation
Wider development Journal articles, seminars,
community conferences, websites.

OUTLINE OF AN EVALUATION REPORT


EXECUTIVE SUMMARY
Usually not more than five pages – the shorter
the better – intended to provide enough
information for busy people, but also to tease
people’s appetite so that they want to read the
full report.

Not essential, but a good place to thank people

PREFACE and make a broad comment about the process,
findings etc.

With page numbers, to help people find their

CONTENTS PAGE way around the report.

SECTION 1: Usually deals with background to the project/

organization, background to the evaluation, the
INTRODUCTION brief to the evaluation team, the methodology,
the actual process and any problems that
occurred.
SECTION 2: Here you would have sections dealing with the
important areas of findings, e.g. efficiency,
FINDINGS:
effectiveness and impact, or the themes that
have emerged.

SECTION 3: Here you would draw conclusions from the

CONCLUSIONS: findings – the interpretation, what they mean. It
is quite useful to use a SWOT Analysis –
explained in Glossary of Terms - as a summary
here.

SECTION 4:
RECOMMENDATIONS: This would give specific ideas for a way
forward in terms of addressing weaknesses and
building on strengths.

Here you would include Terms of Reference, list

APPENDICES:
of people interviewed, questionnaires used,
possibly a map of the area and so on.

LEARNING
Learning is, or should be, the main reason why a project or organization monitors its
work or does an evaluation. By learning what works and what does not, what you are
doing right and what you are doing wrong, you, as project or organization
management, are empowered to act in an informed and constructive way. This is part of
a cycle of action reflection. (See the diagram in the section on why do monitoring and
evaluation?)

The purpose of learning is to make changes where necessary, and to identify and
build on strengths where they exist. Learning also helps you to understand, to make
conscious, assumptions you have. So, for example, perhaps you assumed that
children at more affluent schools would have benefited less from your intervention
than those from less affluent schools. Your monitoring data might show you that this
assumption was wrong. Once you realize this, you will probably view your
interactions with these schools differently.

Being in a constant mode of action-reflection-action also helps to make you less

complacent. Sometimes, when projects or organizations feel they “have got it right”,
they settle back and do things the same way, without questioning whether they are
still getting it right. They forget that situations change, that the needs of project
beneficiaries may change, and that strategies need to be reconsidered and revised.
So, for example, an organization provided training and programs for community
radio stations. Because it had excellent equipment and an excellent production
studio, it invited stations to send presenters to its training centre for training in how
to present the programs it (the organization) was producing. It developed an
excellent reputation for high quality training and production. Over time, however,
the community radio stations began to produce their own programs and what they
really wanted was for the organization to send someone to their stations to help them
workshop ideas and to give them feedback on the work they were doing. This came
out in an evaluation process and organization realized that it had become a bit smug
in the comfort zone of what it was good at, but that, if it really wanted to help
community radio stations, it needed to change its strategy.
Organizations and projects that don’t learn, stagnate. The process of rigorous
monitoring and evaluation forces organizations and projects to keep learning - and
growing.

EFFECTIVE DECISION-MAKING
As project or organization management, you need the conclusions and
recommendations that come out of monitoring and evaluation to help you make
decisions about your work and the way you do it. The success of the process is
dependent on the ability of those with management responsibilities to make decisions
and take action. The steps involved in the whole process are:

• Plan properly – know what you are trying to achieve and how you intend to
achieve it
• Implement
• Monitor and evaluate.
• Analyze the information you get from monitoring and evaluation and work out
what it is telling you.
• Look at the potential consequences to your plans of what you have learned from
the analysis of your monitoring and evaluation data.
• Draw up a list of options for action.
• Get consensus on what you should do and a mandate to take action.
• Share adjustments and plans with the rest of the organization and, if necessary,
your donors and beneficiaries.
• Implement.
• Monitor and evaluate.

The key steps for effective decision making are:

• As a management team, understand the implications of what you have learned.

• Work out what needs to be done and have clear motivations for why it needs
to be done.
• Generate options for how to do it.
• Look at the options critically in terms of which are likely to be the most
effective.
• Agree as a management team.
• Get organizational/ project consensus on what needs to be done and how it
needs to be done.
• Get a mandate (usually from a Board, but possibly also from donors and
beneficiaries) to do it.
• Do it.
DEALING WITH RESISTANCE

Not everyone will be pleased about any changes in plans you decide need to be made.
People often resist change. Some of the reasons for this include:

• People are comfortable with things the way they are – they don’t want to be
pushed out of their comfort zones.
• People worry that any changes will lessen their levels of productivity – they
feel judged by what they do and how much they do, and don’t want to take the time
out necessary to change plans or ways of doing things.
• People don’t like to rush into change – how do we know that something
different will be better? They spend so long thinking about it that it is too late for
useful changes to be made.
• People don’t have a “big picture”. They know what they are doing and they
can see it is working, so they can’t see any reason to change anything at all.
• People don’t have a long term commitment to the project or the organization –
they see it as a stepping stone on their career path. They don’t want change
because it will delay the items they want to be able to tick off on their CV.
• People feel they can’t cope – they have to keep doing what they are doing but
also
• Work at bringing about change. It’s all too much.

How can you help people accept changes?

• Make the reasons why change is needed very clear – take people through the
findings and conclusions of the monitoring and evaluation processes, involve them in
decision-making.
• Help people see the whole picture – beyond their little bit to the overall impact
on the problem analyzed.
• Focus on the key issues – we have to do something about this!
• Recognize anger, fear, and resistance. Listen to people; give them the
opportunity to express frustration and other emotions.
• Find common ground – things that they also want to see changed.
• Encourage a feeling that change is exciting, that it frees people from doing
things that are not working so they can try new things that are likely to work, that it
releases productive energy.
• Emphasize the importance of everyone being committed to making it work.
• Create conditions for regular interaction – anything from a seminar to graffiti
on a notice board - to discuss what is happening and how it is going.
• Pace change so that people can deal with it.
 CHAPTER-VI
BEST PRACTICE
EXAMPLES OF INDICATORS
Please note that these are just examples – they may or may not suit your needs but
they should give you some idea of the kind of indicators you can use, especially for
measuring impact.

Economic Development Indicators

• Average annual household income

• Average weekly/monthly wages
• Employment, by age group
• Unemployment, by age group, by gender
• Employment, by occupation, by gender
• Government employment
• Earned income levels
• Average length of unemployment period
• Default rates on loans
• Ratio of home owners to renters
• Per capita income
• Average annual family income
• % people below the poverty line
• Ratio of seasonal to permanent employment
• Growth rate of small businesses
• Value of residential construction and/or renovation

Social Development Indicators

• Death rate
• Life expectancy at birth
• Infant mortality rates
• Causes of death
• Number of doctors per capita
• Number of hospital beds per capita
• Number of nurses per capita
• Literacy rates, by age and gender
• Student: teacher ratios
• Retention rate by school level
• School completion rates by exit points
• Public spending per student
 • Number of suicides
• Causes of accidents
• Dwellings with running water
• Dwellings with electricity
• Number of homeless
• Number of violent crimes
• Birth rate
• Fertility rate
• Gini distribution of income (see Glossary of Terms)
• Infant mortality rate
• Rates of hospitalization
• Rates of HIV infection
• Rates of AIDS deaths
• Number of movie theatres/swimming pools per 1000 residents
• Number of radios/televisions per capita
• Availability of books in traditional languages
• Traditional languages taught in schools
• Time spent on listening to radio/watching television by gender
• Number of programs on television and radio in traditional languages and/or
dealing with traditional customs
• Church participation, by age and gender

Political/ Organizational Development Indicators

• Number of community organizations

• Types of organized sport
• Number of tournaments and games
• Participation levels in organized sport
• Number of youth groups
• Participation in youth groups
• Participation in women’s groups
• Participation in groups for the elderly
• Number of groups for the elderly
• Structure of political leadership, by age and gender
• Participation rate in elections, by age and gender
• Number of public meetings held
• Participation in public meetings, by age and gender
DESIGNING A MONITORING SYSTEM – CASE STUDY
What follows is a description of a process that a South African organization called
Puppets against AIDS went through in order to develop a monitoring system which
would feed into monitoring and evaluation processes.

The main work of the organization is presenting workshopped plays and/or puppet
shows related to lifeskill issues, especially those lifeskills to do with sexuality, at
schools, across the country. The organization works with a range of age groups, with
different “products” (scripts) being appropriate at different levels.

Puppets against AIDS wanted to develop a monitoring and evaluation system that
provided useful information on the efficiency, effectiveness and impact of its
operations. To this end, it wanted to develop a data base that:

• Provided all the basic information the organization needed about clients and
services given.
• Produced reports that enabled the organization to inform itself and other
stakeholders, including donors, partners and even schools, about the impact of the
work, and what affected the impact of the work.

The organization made a decision to go for a computerized monitoring system. Much

of the day-to-day information needed by the organization was already on a
computerized data base (e.g. schools, regions, services provided and so on), but the
monitoring system would require a substantial upgrading and the development of data
base software specific to the organization’s needs. The organization also made the
decision to develop a system initially for a pilot project, but with the intention of
extending it to all the work over time. This pilot project would work with about 60
schools, using different scripts each year, over a period of three years. In order to raise
the money needed for this process, Puppets against AIDS needed some kind of a brief
for what was required so that it could be costed.

At an initial workshop with staff, facilitated by consultants, the staff generated a list
of indicators for efficiency, effectiveness and impact, in relation to their work. These
were the things staff wanted to know from the system about what they did, how they
did it, and what difference it made. The terms were defined as follows:

Efficiency Here what needed to be assessed was how quickly, how correctly, how
cost effectively and with what use of resources the services of the
organization were offered. Much of this information was already
collected and was contained in reports which reflected planning
against achievement. It needed to be made “computer friendly”.

Effectiveness Here what needed to be assessed was getting results in terms of the
strategy and shorter-term impact. For example, were the puppet
shows an effective means of communicating messages about
 sexuality? Again, this information was already being collected
and just needed to be adapted to fit the computerized system.

Impact Here what needed to be assessed was whether the strategy worked in that it
had an impact on changing behavior in individuals (in this case the
students) and that that change in behavior impacted positively on
the society of which the individuals are a part. The organization
had a strong intuitive feeling that it was working, but wanted to
be able to measure this more scientifically and to be able to look
at what variables made impact more or less likely, or affected the
degree of impact.

Staff generated a list of the different variables that they thought might be important in
assessing and accounting for differences of impact. The monitoring system would
need to link information on impact to these variables. The intention was to provide
both qualitative and quantitative information.

The consultants and a senior staff member then developed measurable indicators of
impact and a tabulation of important variables which included:

• Gender and age profile of proposed age cohort

• Economic profile of school
• Religious profile of the school
• Teacher profile at the school
• Approach to discipline at the school
• Which scripts were used
• Which acting teams presented the scripts
• And so on.

Forms/questionnaires were developed to measure impact indicators before the first

intervention (to provide baseline information) and then at various points in the
process, as well as to categories such concepts as “teacher profile”. With the student
questionnaire, it was designed in such a way to make it possible to aggregate a score
which could be compared when the questionnaire was administered at different stages
in the process. The questionnaire took the form of a series of statements with which
students were asked to agree/disagree/strongly agree/strongly disagree etc. So, for
example, statements to do with an increase in student self-esteem included “When I
look in a mirror, I like what I see”, and “Most of the people I know like the real me”.

The organization indicated that it wanted the system to generate reports that would
enable it to know:

• What difference is there between the indicator ratings on the impact objective
at the beginning and end of the process?

• What difference is there between teacher attitudes at the beginning and end of
the process?

• What variables to do with the school and school environment impact on the
degree of difference between indicators at the beginning and end of the process?

• What variables to do with the way in which the shows are presented impact on
the degree of difference at the beginning and end of the process?

All this was written up as a brief which was given to software experts who then came
up with a system that would meet the necessary requirements. The process was slow
and demanding but eventually the system was in place and it is currently being tested.
FIELDWORKER REPORTING FORMAT

This format was used by an early childhood development learning centre to measure
the following indicators in the informal schools with which it worked:

• Increasingly skilled educate teachers.

• Increased amount of self-made equipment.
• Records up-to-date.
• Payments up-to-date.
• Attendance at committee meetings.

FIE
LD VISIT REPORT

Date:

Name of school:

Information obtained from:

Report completed by:

Field visit number:____

--------------------------------------------------------------------------------

-------------

1. List the skills used by the teachers in the time period of your visit to the school:

2. List self-made equipment visible in the school:

3. List the fundraising activities the school committee is currently involved in:

4. Record-keeping assessment:

Up-to-date
Kind of Up-to-date but not Not up -to- Not attempted
Record and accurate very date
accurate
Bookkeeping
Petty cash
Filing

Correspondence
Stock control
Registers

5. Number of children registered:

Average attendance over past two months:

6. Number of payments outstanding for longer than two months:

7. Average attendance at committee meetings over past two months:

8. Comments on this visit:

9. Comparison with previous field visit:

 PART-II
CHAPTER-VII
METHODOLOGY OF PROJECT APPRAISAL
Appraisal involves a careful checking of the basic data, assumptions and
methodology used in project preparation, an in-depth review of the work plan, cost estimates
and proposed financing, an assessment of the project's organizational and management
aspects, and finally the viability of project
It is mandatory for the Project Authorities to undertake project appraisal or atleast
give details of financial, economic and social benefits and suitably incorporate it in the PC-I.
These projects are examined in the Planning and Development Division from the technical,
institutional/ organizational/ managerial, financial and economic point of view depending on
nature of the project. On the basis of such an assessment, a judgment is reached as to
whether the project is technically sound, financially justified and viable from the point of
view of the economy as a whole.
In the Planning and Development Division, there is a division of labor in the
appraisal of projects prepared by the concerned Executing Agencies. The concerned
Technical Section in consultation with other technical sections i.e; Physical Planning &
Housing, Manpower, Governance and Environment sections undertake the technical
appraisal, wherever necessary. This covers engineering, commercial, organizational and
managerial aspects, while the Economic Appraisal Section carries out the pre-sanction
appraisal of the development projects from the financial and economic points of view.
Economic appraisal of a project is concerned with the desirability of carrying out the project
from the standpoint of its contribution to the development of the national economy. Whereas
financial analysis deals with only costs and returns to project participants, economic analysis
deals with costs and returns to society as a whole. The rationale behind the project appraisal
is to provide the decision-makers with financial and economic yardsticks for the selection/
rejection of projects from among competing alternative proposals for investment. The
techniques of project appraisal can be divided under two heads:-
• Undiscounted
o Pay back period
 o Profit & Loss account
• Discounted
o Net Present Value (NPV)
o Benefit Cost Ratio (BCR)
o Internal Rate of Return (IRR)
o Sensitivity Analysis (treatment of uncertainty)
o Domestic Resource Cost (Modified Bruno Ratio)

Different investment appraisal criteria are given at Appendix-I. Economic viability

of the project is invariably judged at 12 percent discount rate/ opportunity cost of capital.
However, in case of financial analysis, the actual rate of interest i.e. the rate at which capital
is obtained is used. For the government-funded projects, the discount rate is fixed by the
Budget Wing of the Finance Division for development loans and advances on yearly basis.
In case the project is funded by more than one source, the financial analysis is carried out on
the weighted average cost of capital (WACC) for each project. If the project is financed
through foreign grants, the financial analysis is undertaken at zero discount rate. However,
the economic analysis is undertaken at 12% discount rate.

Many investment projects are addition to existing facilities/ activities and thus
benefits and costs relevant to the new project are those that are incremental to what would
have occurred if the new project had not been added. During the operating life of a project,
it is very important to measure all costs and benefits as the difference between what these
variables would be if no project (without project) were undertaken and what they will be
should the project be implemented (with project). It is very common error to assume that all
costs and benefits are incremental to the new project when, in fact, they are not. Hence,
considerable care must be taken in defining a “base case” which realistically sets out the
profile of costs and benefits expected if no additional investment is undertaken.

• Practical Examples

o Production Sector Appendix-II

o Infrastructure Sector Appendix-III
o Social Sector Appendix-IV
 Appendix-I

Investment Appraisal Criteria

• Discounted measures
o Financial Analysis (undertaken at market prices)
 Net Present Value (NPV)
 Benefit-Cost Ratio (BCR)
 Financial Internal Rate of Return (FIRR)
 Return on Equity (ROE) after taxes
 Unit Cost Analysis
o Economic Analysis (undertaken at shadow/economic prices)
 Net Present Value (NPV)
 Benefit-Cost Ratio (BCR)
 Economic Internal Rate of Return (EIRR)
 Modified Bruno Ratio
o Sensitivity Analysis*
 Assuming cost over-run
 Delay in realization of benefits

• Undiscounted Measures
o Profit & Loss Account
o Break-even analysis
o Pay back period

--------------------------------------------------------------------------------------------
*Sensitivity analysis is undertaken under both financial and economic analyses.
 Appendix-II

Example - Production Sector Project

The Project: The objective of the project is to establish of a Soda Ash plant to meet
the domestic demand of the country. The salient features of the project are as under:
• Capital Cost: Million Rs.
o Local Cost 517.12

o F.E.C 198.88
Total: 716.00
• Break down of capital cost
Serial Items Cost
( Rs in million)
1 Land 25.00
2 Civil Works 43.60
3 Machinery (L) 173.61
4 Machinery (F) 163.10
5 Transport 9.00
6 Duty & Taxes 52.20
7 Insurance & Frreight. 12.80
8 Procurement 13.85
9 Transfer of technology 35.78
10 Erection Exp. 33.40
11 Training 2.00
12 Ph.contingencies 28.22
13 Price contingencies 46.15
14 PMU 10.00
15 IDC 67.28
Total: 716.00
• Sources of financing
o Equity Rs. 242 Million 34 %
o Loan Rs.474 Million 76 %
• Terms & conditions of the loan
oInterest rate 11% per annum
oRepayment period 10 years.
oTen annual equal installments with no grace period.
oInterest during construction to be paid

• O & M Cost
Cost (Rs in Million)
Serial Items / Year
Year 1 Year 2 Year 3 Year4-10
VARIABLE COST
1 Sea Salt 7.93 9.25 10.02 11.70
2 Lime Stone 2.25 2.62 3.28 3.47
3 Ammonia 0.9 2.50 3.13 3.31
4 Caustic 2.24 4.12 6.50 6.89
5 Hydrochloric Acid 0.31 0.36 0.45 0.48
6 Gas 0.79 0.92 1.15 1.22
7 Coke 24 27.86 34.83 35.50
8 Electricity 0.5 1.50 2.75 4.50
9 Water 2.8 3.26 4.08 4.32
10 Sales Tax 2.5 3.50 5.91 5.50
11 Packing material 4.92 5.73 6.50 6.19
 12 Freight 3.75 4.37 5.46 5.79
13 Marketing expenses 3.50 4.00 4.50 5.00
14 Wages 2.50 3.00 3.50 4.00
FIXED COST
1 Wages 7.5 7.5 7.5 7.5
2 Insurance 2.3 3.5 4.95 5.63
Total: 68.69 84.00 104.50 111.00

• Implementation period of the project 3 years.

• Life of the project to be 10 years after completion.
• Price of the output is Rs.47500 per ton.
• Capacity utilization with annual production of soda ash is as under:
oYear 1 = 58.3%
oYear 2 = 75.0%
oYear 3 = 83.3%
oYear 4-10 = 100%
• Weighted Average Cost of capital (WACC) is calculated as under:

Interest rate
Rs in Million % Share Weightage
(%)
Equity 242 34% 8.22 2.78%
Loan 474 66% 11.00 7.28%
Total 716 100 - 10.06%

Results are obtained by using Microsoft Excel i.e. by using the icon ‘fx” on
computer Toolbar.
• Financial Analysis: The following analyses have been undertaken in the financial
analysis.
o Project Financing Annex- A

o Breakdown of capital cost Annex-B

 o Loan re-payment schedule Annex-C

o O & M cost Annex-D

o Depreciation schedule Annex-E

o Salvage value Annex-F

o Profit and Loss Account Annex-G

o Financial Analysis (NPV, BCR & EIRR) Annex-H

o Sensitivity Analysis Cost overrun (NPV, BCR & FIRR) Annex-J

o Sensitivity Analysis Cost Delay (NPV, BCR & FIRR) Annex-K

o Return on equity Annex-L

o Break even analyses Annex-M

o Pay back period Annex-N

• Economic Analysis:
o Economic Prices of the output is taken as Rs.35000 per tons.
o The financial capital cost and O&M cost of traded items has been
converted into economic cost by deducting taxes and duties.
o The non – traded costs have been converted into economic cost by
using standard conversion factor of 0.909.
In Economic Analysis, the following analyses have been undertaken:-
 Conversion of capital cost into economic cost Annex-O & P

 Conversion of O&M cost into economic cost Annex- Q, R & S

 Annex- A
To Appendix-II

FINANCING OF THE PROJECT

Amount (Rs in Million)

Source
% Year 0 Year 1 Year 2 Total
1. Equity 34.00 112.00 130.00 0.00 242.00
2. Loan 66.00 124.00 350.00 474.00
Total 112.00 254.00 350.00 716.00
Interest during construction 13.64 53.64 67.280
 Annex- B
To Appendix-II
BREAKDOWN OF CAPITAL COST
 Amount (Rs in Million)
Items
Year 0 Year 1 Year 2 Total
1. Land 25 0 0 25
2. Civil Works 6.54 17.44 19.62 43.6
3. Machinery (L) 26.09 69.26 78.26 173.61
4. Machinery (F) 24.47 65.24 73.40 163.11
5 Transport 1.35 7.65 0.00 9
6. Duty & Taxes 7.83 20.88 23.49 52.2
7. Insurance & Fr. 1.92 5.12 5.76 12.8
8. Procurement 2.12 5.52 6.21 13.85
9. Technology Transfer 5.79 12.70 17.29 35.78
10. Erection Exp. 0.00 11.20 22.20 33.4
11.Training 0.30 0.80 0.90 2
Sub-total base cost 101.41 215.81 247.13 564.35
12. Ph. Contingencies 5% 5.07 10.79 12.36 28.22
13 Price contingencies 6.5% 0 14.03 32.13 46.15
14 PMU 1.50 4.00 4.50 10.00
15. IDC * 0 13.64 53.64 67.28
Total 107.98 258.27 349.75 716.00
 Annex- C
To Appendix-II

Loan Repayment Schedule

Terms & Conditions of loan

• Loan amount
o Year 0 0
o Year 1 124.00
o Year 2 350.00
Total 474.00

• Nominal interest rate 11%

• Repayment in 10 equal installments yearly
• No grace period

Amount (Rs in Million)

Years / Items
0 1 2 3 4 5 6 7 8 9 10 11 12
Loan received at the beginning of the year 124.00 350.00
Outstanding debt at the end of year 124 474.00 474.00 393.51 393.51 393.51 393.51 393.51 393.51 393.51 393.51 393.51
Interest accrued during the year 0 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Annual repayment installment 0.00 80.49 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
(a) Interest 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
(b) Principal 0.00 80.49 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Outstanding debt at the end of year 124.00 474.00 393.51 393.51 393.51 393.51 393.51 393.51 393.51 393.51 393.51 393.51
 Annex- D
To Appendix-II

O & M COST

Amount (Rs in Million)

Items / Year
Year 1 Year 2 Year 3 Year4-10
VARIABLE COST
1. Sea Salt 7.93 9.25 10.02 11.70
2. Lime Stone 2.25 2.62 3.28 3.47
3. Ammonia 0.9 2.50 3.13 3.31
s4. Caustic 2.24 4.12 6.50 6.89
5. Hydrochloric Acid 0.31 0.36 0.45 0.48
6. Gas 0.79 0.92 1.15 1.22
7. Coke 24 27.86 34.83 35.50
8. Electricity 0.5 1.50 2.75 4.50
9. Water 2.8 3.26 4.08 4.32
10. Sales Tax 2.5 3.50 5.91 5.50
11. Packing material 4.92 5.73 6.50 6.19
12. Freight 3.75 4.37 5.46 5.79
13 Marketing expenses 3.50 4.00 4.50 5.00
14. Wages 2.50 3.00 3.50 4.00
FIXED COST
1. Wages 7.5 7.5 7.5 7.5
2. Insurance 2.3 3.5 4.95 5.63
Total 68.69 84.00 104.50 111.00

Annex- E
 To Appendix-II

Depreciation Schedule

Cost Annual dep.

Items Life Rate
(Rs in Mn) (Rs in Mn)
1. Land 25.00 40 2.5% 0.63
2. Civil works 43.60 40 2.5% 1.09
3. Machinery 484.75 10 10.0% 48.48
4. Transport 9.00 5 20.0% 1.80
5. Training 2.00 10 10.0% 0.20
6.
Ph.Contingencies 28.22 10 10.0% 2.82
Total 592.57 53.84
 Annex- F
To Appendix-II

Salvage Value

Amount
Items Cost Rate (Rs in Million)

0.00
1. Land 25.00 100% 25.00
2. Civil works 43.60 75% 32.70
3. Machinery 486.75 15% 73.01
4. Transport 9.00 25% 2.25
5. Training 2.00 0% 0.00
6. Ph.Contingencies 28.22 10% 2.82
Total 626.65 135.78
 Annex- G
To Appendix-II
FINANCIAL ANALYSIS OF AN INDUSTRIAL PROJECT
(PROFIT AND LOSS ACCOUNT)

Amount (Rs in Million)

ITEMS
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Sales (Tons) 3500 4500 5000 6000 6000 6000 6000 6000 6000 6000
Selling Price (Rs./Tons) 47500 47500 47500 47500 47500 47500 47500 47500 47500 47500
166.2
Income 5 213.75 237.50 285.00 285.00 285.00 285.00 285.00 285.00 285.00
Cost of Production 65.19 80.00 100.00 106.00 106.00 106.00 106.00 106.00 106.00 106.00
Marketing expenses 3.50 4.00 4.50 5.00 5.00 5.00 5.00 5.00 5.00 5.00
Gross profit 97.56 129.75 133.00 174.00 174.00 174.00 174.00 174.00 174.00 174.00
Financing Charges 80.49 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
I)Principal 80.49 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
ii) Interest 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Depreciation 53.84 53.84 53.84 53.84 53.84 53.84 53.84 53.84 53.84 53.84
Profit before Taxes -33.27 79.91 83.65 125.16 125.16 125.16 125.16 125.16 125.16 125.16
Worker's Participation Fund (5%) 0.00 0.00 4.18 6.26 6.26 6.26 6.26 6.26 6.26 6.26
Income Tax (35% of profit) 0.00 0.00 29.28 43.80 43.80 43.80 43.80 43.80 43.80 43.80
Profit after Taxes -33.27 79.91 50.19 75.09 75.09 75.09 75.09 75.09 75.09 75.09
Cumulative Profit -33.27 46.64 96.83 171.93 247.02 322.11 397.21 472.30 547.40 622.49
 Annex- H
To Appendix-II

FINANCIAL ANALYSIS OF AN INDUSTRIAL PROJECT

Amount (Rs in Million)

Years Capital Cost O&M Cost Total Cost T. Benefits Net Benefits
0 107.98 0.00 107.98 0.00 -107.98
1 230.60 0.00 230.60 0.00 -230.60
2 263.99 0.00 263.99 0.00 -263.99
3 0.00 68.69 68.69 166.25 97.56
4 0.00 84.00 84.00 213.75 129.75
5 0.00 104.50 104.50 237.50 133.00
6 0.00 111.00 111.00 285.00 174.00
7 * 9.00 111.00 120.00 285.00 165.00
8 0.00 111.00 111.00 285.00 174.00
9 0.00 111.00 111.00 285.00 174.00
10 0.00 111.00 111.00 285.00 174.00
11 0.00 111.00 111.00 285.00 174.00
12 0.00 111.00 111.00 285.00 174.00
13 -135.78 0.00 -135.78 0.00 135.78
Total 475.78 1034.20 1509.98 2612.50 1102.52

Results at 10.06% discount rate

1008.4
• Present Value of Cost (PVC) : 4 (Rs in Million)
1274.9
• Present Value of Benefits (PVB) : 3 (Rs in Million).
• Net Present Value (NPV) : 266.50 (Rs in Million)
• Benefit Cost Ratio (BCR) : 1.26 : 1
• Financial Internal Rate of Return (FIRR) : 17.76%
* Replacement cost of vehicle
 Annex- J
To Appendix-II

FINANCIAL ANALYSIS OF AN INDUSTRIAL PROJECT

(SENSITIVITY ANALYSIS)

Year
COST OVER-RUN BY 10% (Rs in Million)
Capital Cost O&M Cost Total Cost Benefit Net Benefits
0 118.78 0.00 118.78 0.00 -118.78
1 253.66 0.00 253.66 0.00 -253.66
2 290.39 0.00 290.39 0.00 -290.39
3 0.00 68.69 68.69 166.25 97.56
4 0.00 84.00 84.00 213.75 129.75
5 0.00 104.50 104.50 237.50 133.00
6 0.00 111.00 111.00 285.00 174.00
7* 9.90 111.00 120.90 285.00 164.10
8 0.00 111.00 111.00 285.00 174.00
9 0.00 111.00 111.00 285.00 174.00
10 0.00 111.00 111.00 285.00 174.00
11 0.00 111.00 111.00 285.00 174.00
12 0.00 111.00 111.00 285.00 174.00
13 -135.78 0.00 -135.78 0.00 135.78
Total 536.94 1034.20 1571.14 2612.50 1041.36

Results at 10.06% discount rate

• Present Value of Cost : 1062.44 (Rs in Million)

• Present Value of Benefits : 1274.93 (Rs in Million)
• Net Present Value (NPV) : 212.49 (Rs in Million)
• Benefit Cost Ratio (BCR) : 1.20: 1
• Financial Internal Rate of Return (FIRR) : 15.82%
* Replacement cost of vehicles
 Annex- K
To Appendix-II

FINANCIAL ANALYSIS OF AN INDUSTRIAL PROJECT

(SENSITIVITY ANALYSIS- One year delay in benefits)

Year
(Rs in Million)
Capital Cost O&M Cost Total Cost Benefit Net Benefits
0 107.98 0.00 107.98 0.00 -107.98
1 230.60 0.00 230.60 0.00 -230.60
2 263.99 0.00 263.99 0.00 -263.99
3 0.00 0.00 0.00 0.00 0.00
4 0.00 68.69 68.69 166.25 97.56
5 0.00 84.00 84.00 213.75 129.75
6 0.00 104.50 104.50 237.50 133.00
7 0.00 111.00 111.00 285.00 174.00
8 * 9.00 111.00 120.00 285.00 165.00
9 0.00 111.00 111.00 285.00 174.00
10 0.00 111.00 111.00 285.00 174.00
11 0.00 111.00 111.00 285.00 174.00
12 0.00 111.00 111.00 285.00 174.00
13 0.00 111.00 111.00 285.00 174.00
14 -135.78 0.00 -135.78 0.00 135.78
Total 475.78 1034.20 1509.98 2612.50 1102.52

Results at 10.06% discount rate

• Present Value of Cost (PVC) : • 965.20 (Rs inMillion)

• Present Value of Benefits (PVB) : •1158.40 (Rs inMillion)
• Net Present Value (NPV) : •193.20 (Rs inMillion)
• Benefit Cost Ratio (BCR) : •1.20: 1
• Financial Internal Rate of Return (FIRR) : 14.96%

* Replacement cost of vehicle

 Annex- L
To Appendix-II

FINANCIAL ANALYSIS OF AN INDUSTRIAL PROJECT

(RETURN ON EQUITY)
(Profit after Tax)

(Rs in Million)
Year
Equity Profit after Taxes Depreciation Net Flow
0 112.00 0.00 0.00 -112.00
1 130.00 0.00 0.00 -130.00
2 0.00 0.00 0.00 0.00
3 0.00 -33.27 53.84 20.57
4 0.00 79.91 53.84 133.75
5 0.00 50.19 53.84 104.03
6 0.00 75.09 53.84 128.94
7 0.00 75.09 53.84 128.94
8 0.00 75.09 53.84 128.94
9 0.00 75.09 53.84 128.94
10 0.00 75.09 53.84 128.94
11 0.00 75.09 53.84 128.94
12 0.00 75.09 53.84 128.94
13 -135.78 0.00 0.00 135.78
Total 242.00 622.49 538.43 918.92

• Return on Equity = 27.2%

 Annex- M
To Appendix-II
BREAK EVEN ANALYSIS
(100% CAPACITY UTILIZATION)

A) SALES 285.00 (Rs in Million)

B) COST
VARIABLE COST (Rs in Million) FIXED COST (Rs in Million)
1. Sea Salt 11.70 1.Management 7.50
2. Lime Salt 3.47 2. Insurance 5.63
3. Ammonia 3.31 3. Depreciation 53.84
4. Caustic 6.89 4. Financial 80.49
5. Hydrochloric Acid 0.48 Charges
6. Gas 1.22
7. Coke 35.50
8. Electricity 4.50
9. Water 4.32
10. Sales Tax 5.50
11. Pack material 6.19
12. Freight 5.79
13 Marketing expenses 5.00
14 Wages 4.00
Total: 97.87 147.46

C) Marginal Income = Sales - Variable Cost 187.13

Break Even Point = Fixed Cost /Marginal Income *100
= 78.8%
 Annex- N

( Rs in Million)
Cumulativ
Year O &M Cumulative
Capital Cost Total Cost e Benefits
cost Benefits
Costs
0 107.98 0.00 107.98 107.98 0.00 0.00
1 230.60 0.00 230.60 338.58 0.00 0.00
2 263.99 0.00 263.99 602.57 0.00 0.00
3 0.00 68.69 68.69 671.26 166.25 166.25
4 0.00 84.00 84.00 755.26 213.75 380.00
5 0.00 104.50 104.50 859.76 237.50 617.50
6 0.00 111.00 111.00 970.76 285.00 902.50
7 9.00 111.00 120.00 1090.76 285.00 1187.50
8 0.00 111.00 111.00 1201.76 285.00 1472.50
To Appendix-II

PAY BACK PERIOD

• Pay back period of the project is about seven years

 Annex- O
To Appendix-II
CONVERSION OF FINANCIAL COST INTO ECONOMIC COST
CAPITAL COST-Y 0 (Rs in Million)
Economic
Financial Traded Cost Economic cost (non-
Non- Standard Total
Cost Taxes cost traded
Item Traded Conversion Economic
(Rs in % (traded items)
Cost Factor Cost
Million) items) (Rs in
% Actual (Col. 6+9)
Million)

1 2 3 4 5 6 7 8 9 10
1.Land 25.00 0% 0.00 0.00 25.00 1 25.00 25.00
2. Civil Works 6.54 30% 1.96 20% 1.57 4.58 0.909 4.16 5.73
3 Machinery (L) 26.09 100% 26.09 30% 18.26 0.00 0.00 18.26
4. Machinery (F) 24.47 100% 24.47 30% 17.13 0.00 0.00 17.13
5. Transport 1.35 100% 1.35 25% 1.01 0.00 0.00 1.01
6. Duty & Taxes 7.83 0 0.00 0 0.00 7.83 0.00 0.00 0.00
7. Insurance & Fr. 1.92 100% 1.92 10% 1.73 0.00 0.909 0.00 1.73
8. Procurement 2.12 50% 1.06 20% 0.85 1.06 0.00 0.85
9. Technology transfer 5.79 100% 5.79 10% 5.21 0.00 0.00 5.21
10. Erection Exp. 0.00 50% 0.00 15% 0.00 0.00 0.00 0.00
11.Training 0.30 100% 0.30 0% 0.30 0.00 0.00 0.30
12. Ph. Contingencies 5% 5.07 30% 1.52 0% 1.52 3.55 0.00 1.52
13 Price contingencies 6.5% 0.00 0% 0.00 0% 0.00 0.00 0.00 0.00
14 PMU 1.50 0% 0.00 0% 0.00 1.50 0.909 1.36 1.36
15. IDC * 0 0% 0.00 0% 0.00 0.00 0.00 0.00
Total 107.98 7.60 64.46 1.60 47.58 43.52 3.73 30.52 78.11

* IDC & Price contingencies are not treated as a cost in discounted analysis.
 Annex- P
To Appendix-II
CONVERSION OF FINANCIAL COST INTO ECONOMIC COST
CAPITAL COST-Y 2 (Rs in Million)
Economic Economic Total
Traded Cost Non- Standard
Item Financial Taxes cost cost (non- Economic
Traded Conversion
Cost % (traded traded Cost
Cost Factor
% Actual items) items) (Col. 6+9)
1 2 3 4 5 6 7 8 9 10
1.Land 0 0% 0.00 0.00 0.00 1 0.00 0.00
2. Civil Works 19.62 30% 5.89 20% 4.71 13.73 0.909 12.48 17.19
3 Machinery (L) 78.26 100% 78.26 30% 54.78 0.00 0.00 54.78
4. Machinery (F) 73.4 100% 73.40 30% 51.38 0.00 0.00 51.38
5. Transport 0 100% 0.00 25% 0.00 0.00 0.00 0.00
6. Duty & Taxes 23.49 0 0.00 0 0.00 23.49 0.00 0.00 0.00
7. Insurance & Fr. 5.76 100% 5.76 10% 5.18 0.00 0.909 0.00 5.18
8. Procurement 6.21 50% 3.11 20% 2.48 3.11 0.00 2.48
9. Technology transfer 17.29 100% 17.29 10% 15.56 0.00 0.00 15.56
10. Erection Exp. 22.2 50% 11.10 15% 9.44 11.10 0.00 9.44
11.Training 0.9 100% 0.90 0% 0.90 0.00 0.00 0.90
12. Ph. Contingencies
5% 12.36 30% 3.71 0% 3.71 8.65 0.00 3.71
13 Price contingencies
6.5% 32.13 0% 0.00 0% 0.00 32.13 0.00 0.00
14 PMU 4.50 0% 0.00 0% 0.00 4.50 0.909 4.09 4.09
15. IDC * 53.64 0% 0.00 0% 0.00 53.64 0.00 0.00
Total 349.75 7.60 199.41 1.60 148.14 150.35 3.73 16.57 164.72

* IDC & Price contingencies are not treated as a cost in discounted analysis.
 Annex- Q
To Appendix-II
CONVERSION OF FINANCIAL O&M COST INTO ECONOMIC COST
O & M COST- Year1 (Rs in Million)
Economic
Traded Cost Economic Non- Total
Financial Taxes Standard cost (non-
Item cost Traded Economic
Cost % Conversion traded
(traded Cost Cost
Factor items)
items) (Col 6+9)
% Actual
1 2 3 4 5 6 7 8 9 10
VARIABLE COST
1. Sea Salt 7.93 0 0.00 0 0.00 7.93 0.909 7.21 7.21
2. Lime Stone 2.25 0 0.00 0 0.00 2.25 0.909 2.05 2.05
3. Ammonia 0.9 100% 0.90 30% 0.63 0.00 0.00 0.63
4. Caustic 2.24 100% 2.24 25% 1.68 0.00 0.00 1.68
5. Hydrochloric Acid 0.31 100% 0.31 20% 0.25 0.00 0.00 0.25
6. Gas 0.79 0 0.00 0 0.00 0.79 2 1.58 1.58
7. Coke 24 100% 24.00 32.5% 16.20 0.00 0.00 16.20
8. Electricity 0.5 0 0.00 0 0.00 0.50 1 0.50 0.50
9. Water 2.8 0 0.00 0 0.00 2.80 2 5.60 5.60
10. Sales Tax 2.5 0 0.00 0 0.00 2.50 0 0.00 0.00
11. Packing material 4.92 50% 2.46 40% 1.48 2.46 0.909 2.24 3.71
12. Freight 3.75 50% 1.88 0 1.88 1.88 0.909 1.70 3.58
13 Marketing expenses 3.5 50% 1.75 32% 1.19 1.75 0.909 1.59 2.78
14 Wages 2.5 0% 0.00 0 0.00 2.50 1 2.50 2.50
FIXED COST
1.Management 7.5 0% 0.00 0 0.00 7.50 1 7.50 7.50
2. Insurance 2.3 0 0.00 0 0.00 2.30 1 2.30 2.30
Total 68.69 - 33.54 1.80 23.30 35.16 12.55 34.76 58.06
 Annex- R
To Appendix-II
CONVERSION OF FINANCIAL O&M COST INTO ECONOMIC COST
O & M COST- Year 2 (Rs in Million)
Economic
Traded Cost Economic Non- Total
Financial Taxes Standard cost (non-
Item cost Traded Economic
Cost % Conversion traded
(traded Cost Cost
Factor items)
items) (Col 6+9)
% Actual
1 2 3 4 5 6 7 8 9 10
VARIABLE COST
1. Sea Salt 9.25 0 0.00 0 0.00 9.25 0.909 8.41 8.41
2. Lime Stone 2.62 0 0.00 0 0.00 2.62 0.909 2.38 2.38
3. Ammonia 2.50 100% 2.50 30% 1.75 0.00 0.00 1.75
4. Caustic 4.12 100% 4.12 25% 3.09 0.00 0.00 3.09
5. Hydrochloric Acid 0.36 100% 0.36 20% 0.29 0.00 0.00 0.29
6. Gas 0.92 0 0.00 0 0.00 0.92 2 1.84 1.84
7. Coke 27.86 100% 27.86 32.5% 18.81 0.00 0.00 18.81
8. Electricity 1.50 0 0.00 0 0.00 1.50 1 1.50 1.50
9. Water 3.26 0 0.00 0 0.00 3.26 2 6.52 6.52
10. Sales Tax 3.50 0 0.00 0 0.00 3.50 0 0.00 0.00
11. Packing material 5.73 50% 2.87 40% 1.72 2.87 0.909 2.61 4.32
12. Freight 4.37 50% 2.18 25% 1.64 2.18 0.909 1.99 3.62
13 Marketing expenses 4.00 50% 2.00 32% 1.36 2.00 0.909 1.82 3.18
14 Wages 3.00 0% 0.00 0 0.00 3.00 1 3.00 3.00
FIXED COST
1.Management 7.50 0% 0.00 0 0.00 7.50 1 7.50 7.50
2. Insurance 3.50 0 0.00 0 0.00 3.50 1 3.50 3.50
Total 84.00 - 41.89 2.05 28.65 42.11 12.55 41.07 69.72
 Annex- S
To Appendix-II
CONVERSION OF FINANCIAL O&M COST INTO ECONOMIC COST
O & M COST- Year 4 (Rs in Million)
Economic
Traded Cost Economic Non- Total
Financial Taxes Standard cost (non-
Item cost Traded Economic
Cost % Conversion traded
(traded Cost Cost
Factor items)
items) (Col 6+9)
% Actual
1 2 3 4 5 6 7 8 9 10
VARIABLE COST
1. Sea Salt 11.70 0 0.00 0 0.00 11.70 0.909 10.63 10.63
2. Lime Stone 3.47 0 0.00 0 0.00 3.47 0.909 3.16 3.16
3. Ammonia 3.31 100% 3.31 30% 2.32 0.00 0.00 2.32
4. Caustic 6.89 100% 6.89 25% 5.17 0.00 0.00 5.17
5. Hydrochloric Acid 0.48 100% 0.48 20% 0.38 0.00 0.00 0.38
6. Gas 1.22 0 0.00 0 0.00 1.22 2 2.44 2.44
7. Coke 35.50 100% 35.50 32.5% 23.96 0.00 0.00 23.96
8. Electricity 4.50 0 0.00 0 0.00 4.50 1 4.50 4.50
9. Water 4.32 0 0.00 0 0.00 4.32 2 8.64 8.64
10. Sales Tax 5.50 0 0.00 0 0.00 5.50 0 0.00 0.00
11. Packing material 6.19 50% 3.10 40% 1.86 3.10 0.909 2.81 4.67
12. Freight 5.79 50% 2.89 0 2.89 2.89 0.909 2.63 5.53
13 Marketing expenses 5.00 50% 2.50 32% 1.70 2.50 0.909 2.27 3.97
14 Wages 4.00 0% 0.00 0 0.00 4.00 1 4.00 4.00
FIXED COST
1.Management 7.50 0% 0.00 0 0.00 7.50 1 7.50 7.50
2. Insurance 5.63 0 0.00 0 0.00 5.63 1 5.63 5.63
Total 111.00 - 54.67 1.80 38.28 56.33 12.55 54.22 92.50
 Appendix-III

Example - Infrastructure Sector Project

Economic/ Financial Analysis (ROAD PROJECT): The project is

designed to construct 20 KMs Road. The following statistical information has been
collected to undertake financial/ economic appraisal of the project:

Year-wise Phasing of Capital Cost:

Year (Rs in Million)

1 603.50
2 691.50
Total 1295.00

• Annual Recurring Cost: 1 % of capital cost

• Implementation Period: 24 months
• Source of Financing: Federal PSDP
• Distance without project: 25 K.M
• Distance With Project: 20 K.M
• Average Daily Traffic (ADT)

ADT
Serial Mode of Transport
(Base Year)
1 Motor Cycle 100
2 Car/ Jeep 3950
3 Mini Bus/ Pickup 1525
4 Bus 403
5 Tractor Trolleys 500
6 Trucks 187

• Traffic Growth: Traffic growth rate per annum of 2 % during construction period and
5%, 4%, 3% and 2% for the first, 2nd, 3rd and 4th five years respectively over the life of the
project has been assumed. Based on the above growth rates, the traffic projections are

given at Annex-A.
• Proposed Toll Tax

Proposed
Serial Mode of Transport
Toll Tax (Rs)
1 Car/Jeep 20.00
2 Mini Bus/Pickup 30.00
3 Bus 80.00
4 Trucks 100.00

Based on the above toll, the revenues are also given at Annex-A

• Life of the Project: 20 Years after completion.

• Replacement Cost: Five times of the O.M Cost after every five years.
• Opportunity cost of capital: 12%
• Financial Benefits: Average daily projected traffic into proposed toll rates.
• Result of financial analysis: The financial analysis of the project has been undertaken
and are paced in the following annexes:-
o Financial Analysis(FIRR, NPV & BCR) Annex-B

o Sensitivity Analysis, 10% cost over-run Annex-C

(FIRR, NPV & BCR)
o Sensitivity Analysis, Benefits delayed Annex-D
(FIRR, NPV & BCR)
o Break-even toll tax Annex-E

• Economic cost: The financial cost has been converted into economic cost by deducting
taxes and duties from the traded cost and the non-traded cost has been multiplied by the

standard conversion factor (SCF). Details are given at Annex-F.

• Economic Benefits: Per vehicle economic benefits have been worked out and given at

Annex-G. The value of savings in travel time, VOC and reduction in distance have
been assumed as under:
 o Savings in Travel Time:
Value of T. Time
Serial Mode of Transport
Rupees/ Hour
1 Car 150
2 Pickup/ wagon 120
3 Bus 350
4 Truck (Light) 120
5 Truck (Medium) 150
6 Truck (Heavy) 175
The details of the benefits on account of savings in Travel Time are given at

Annex-H.
o Savings in Vehicles Operating Cost (VOC):
Without Project With Project
Savings
Vehicle Speed VOC Speed VOC
(Rs/
Type (km/hr (Rs/ (km/hr (Rs/
km)
) km) ) km)
Car 50 11.50 70 10.50 1.00
Wagon 40 9.68 60 8.40 1.28
Bus 35 19.79 55 17.76 2.03
Truck 30 20.81 50 18.71 2.10
(All
Types)
The details of savings in VOC for are given at Annex- J. (The benefits on
account of Motor Cycle and Tractor Trolleys have not been taken into account
being a traffic hazard)
o Benefits on account of 5 kms reduction in distance: (Annex-K)

• Result of Economic Analysis: The economic analysis of the project has been carried out
and are given in the following annexes:-
o Economic Analysis(EIRR,NPV & BCR) Annex-L

o Sensitivity Analysis, 10% cost over-run Annex-M

(EIRR, NPV & BCR)
o Sensitivity Analysis, Benefits delayed Annex-N
(EIRR, NPV & BCR)
Annex- A
 To Appendix – III

PROJECTION OF DAILY TRAFFIC COUNT (ADT)

CONSTRUCTION OF 20 KM ROAD

Cars Pickup/ Buses Trucks Total Traffic Cars Toll Revenues

YEAR Wagons (All types) (Numbers) Equivalent (Rs in Million)
Cars Equivalent 1.0 1.5 3.0 4.0
Base Year 3950 1525 403 187 6065 6717636
Construction 4029 1556 411 191 6186 6851989
Constructions 4110 1587 419 195 6310 6989028
1 4315 1666 440 204 6626 7338480 70.05
2 4531 1749 462 214 6957 7705404 73.56
3 4757 1837 485 225 7305 8090674 77.23
4 4995 1929 510 236 7670 8495208 81.10
5 5245 2025 535 248 8053 8919968 85.15
6 5455 2106 557 258 8376 9276767 88.56
7 5673 2190 579 269 8711 9647838 92.10
8 5900 2278 602 279 9059 10033751 95.78
9 6136 2369 626 290 9421 10435101 99.61
10 6381 2464 651 302 9798 10852505 103.60
11 6573 2538 671 311 10092 11178080 106.71
12 6770 2614 691 321 10395 11513423 109.91
13 6973 2692 711 330 10707 11858825 113.20
14 7182 2773 733 340 11028 12214590 116.60
15 7398 2856 755 350 11359 12581028 120.10
16 7546 2913 770 357 11586 12832648 122.50
17 7697 2971 785 364 11818 13089301 124.95
18 7850 3031 801 372 12054 13351087 127.45
19 8008 3092 817 379 12295 13618109 130.00
20 8168 3153 833 387 12541 13890471 132.60

Annex- B
 To Appendix – III
FINANCIAL ANALYSIS
CONSTRUCTION OF 20 KM ROAD

(Rs in Million)
YEAR CAPITAL O & M TOTAL BENEFITS NET
COST COST COST (Toll Revenue) BENEFITS
0 603.50 0.00 603.50 0.00 -603.50
1 691.50 0.00 691.50 0.00 -691.50
2 0.00 12.95 12.95 70.05 57.10
3 0.00 12.95 12.95 73.56 60.61
4 0.00 12.95 12.95 77.23 64.28
5 0.00 12.95 12.95 81.10 68.15
6 0.00 64.75 64.75 85.15 20.40
7 0.00 12.95 12.95 88.56 75.61
8 0.00 12.95 12.95 92.10 79.15
9 0.00 12.95 12.95 95.78 82.83
10 0.00 12.95 12.95 99.61 86.66
11 0.00 64.75 64.75 103.60 38.85
12 0.00 12.95 12.95 106.71 93.76
13 0.00 12.95 12.95 109.91 96.96
14 0.00 12.95 12.95 113.20 100.25
15 0.00 12.95 12.95 116.60 103.65
16 0.00 64.75 64.75 120.10 55.35
17 0.00 12.95 12.95 122.50 109.55
18 0.00 12.95 12.95 124.95 112.00
19 0.00 12.95 12.95 127.45 114.50
20 0.00 12.95 12.95 130.00 117.05
21 0.00 12.95 12.95 132.60 119.65
TOTAL: 1295.00 414.40 1709.40 2070.76 361.36

RESULTS AT 8.22% DISCOUNT RATE

• P.V. OF TOTAL COST (Rs in Million) 1426.67
• P.V. OF BENEFITS (Rs in Million) 847.71
• N.P.V (Rs in Million) -578.96
• B.C.R. 0.59:1
• F.I.R.R. 2.07%
Annex- C
To Appendix – III
FINANCIAL ANALYSIS
 CONSTRUCTION OF 20 KM ROAD
SENSITIVITY ANALYSIS (10% COST OVER-RUN (Rs in Million)
CAPITAL O & M TOTAL NET
YEAR BENEFITS
COST COST COST BENEFITS
0 663.85 0.00 663.85 0.00 -663.85
1 760.65 0.00 760.65 0.00 -760.65
2 0.00 12.95 12.95 70.05 57.10
3 0.00 12.95 12.95 73.56 60.61
4 0.00 12.95 12.95 77.23 64.28
5 0.00 12.95 12.95 81.10 68.15
6 0.00 64.75 64.75 85.15 20.40
7 0.00 12.95 12.95 88.56 75.61
8 0.00 12.95 12.95 92.10 79.15
9 0.00 12.95 12.95 95.78 82.83
10 0.00 12.95 12.95 99.61 86.66
11 0.00 64.75 64.75 103.60 38.85
12 0.00 12.95 12.95 106.71 93.76
13 0.00 12.95 12.95 109.91 96.96
14 0.00 12.95 12.95 113.20 100.25
15 0.00 12.95 12.95 116.60 103.65
16 0.00 64.75 64.75 120.10 55.35
17 0.00 12.95 12.95 122.50 109.55
18 0.00 12.95 12.95 124.95 112.00
19 0.00 12.95 12.95 127.45 114.50
20 0.00 12.95 12.95 130.00 117.05
21 0.00 12.95 12.95 132.60 119.65
TOTAL: 1424.50 401.45 1825.95 1938.16 112.21

RESULTS AT 8.22% DISCOUNT RATE

• P.V. OF TOTAL COST (Rs in Million) 1550.92
• P.V. OF BENEFITS (Rs in Million) 847.71
• N.P.V (Rs in Million) -703.21
• B.C.R. 0.55:1
• E.I.R.R. 1.25%

Annex- D
To Appendix – III
FINANCIAL ANALYSIS
CONSTRUCTION OF 20 KM ROAD
SENSITIVITY ANALYSIS - Benefits delayed by one year (Rs in Million)
YEAR CAPITAL O&M TOTAL BENEFITS NET
COST COST COST BENEFITS
0 603.50 0.00 603.50 0.00 -603.50
1 691.50 0.00 691.50 0.00 -691.50
2 0.00 0.00 0.00 0.00 0.00
3 0.00 12.95 12.95 70.05 57.10
4 0.00 12.95 12.95 73.56 60.61
5 0.00 12.95 12.95 77.23 64.28
6 0.00 12.95 64.75 81.10 16.35
7 0.00 64.75 12.95 85.15 72.20
8 0.00 12.95 12.95 88.56 75.61
9 0.00 12.95 12.95 92.10 79.15
10 0.00 12.95 12.95 95.78 82.83
11 0.00 12.95 64.75 99.61 34.86
12 0.00 64.75 12.95 103.60 90.65
13 0.00 12.95 12.95 106.71 93.76
14 0.00 12.95 12.95 109.91 96.96
15 0.00 12.95 12.95 113.20 100.25
16 0.00 12.95 64.75 116.60 51.85
17 0.00 64.75 12.95 120.10 107.15
18 0.00 12.95 12.95 122.50 109.55
19 0.00 12.95 12.95 124.95 112.00
20 0.00 12.95 12.95 127.45 114.50
21 0.00 12.95 12.95 130.00 117.05
22 0.00 12.95 0.00 132.60 132.60
TOTAL: 1295.00 401.45 1683.50 1808.16 124.66

RESULTS AT 8.22% DISCOUNT RATE

• P.V. OF TOTAL COST (Rs in Million) 1415.61
• P.V. OF BENEFITS (Rs in Million) 760.00
• N.P.V (Rs in Million) -655.61
• B.C.R. 0.54:1
• F.I.R.R. 1.36%

Annex- E
To Appendix – III

FINANCIAL ANALYSIS
(BREAK-EVEN TOLL TAX)
 CONSTRUCTION OF 20 KM ROAD
(Rs in Million)
Traffic Cars
YEAR CAPITAL O & M TOTAL Equivalent
COST COST COST
1 603.50 0.00 603.50 0.00
2 691.50 0.00 691.50 0.00
3 0.00 12.95 12.95 3267420
4 0.00 12.95 12.95 3430791
5 0.00 12.95 12.95 3602331
6 0.00 12.95 12.95 3782447
7 0.00 64.75 64.75 3971569
8 0.00 12.95 12.95 4130432
9 0.00 12.95 12.95 4295650
10 0.00 12.95 12.95 4467476
11 0.00 12.95 12.95 4646175
12 0.00 64.75 64.75 4832022
13 0.00 12.95 12.95 4976982
14 0.00 12.95 12.95 5126292
15 0.00 12.95 12.95 5280080
16 0.00 12.95 12.95 5438483
17 0.00 64.75 64.75 5601637
18 0.00 12.95 12.95 5713670
19 0.00 12.95 12.95 5827943
20 0.00 12.95 12.95 5944502
21 0.00 12.95 12.95 6063392
22 0.00 12.95 12.95 6184660
TOTAL: 1295.00 414.40 1709.40 96583954

RESULTS AT 8.22% DISCOUNT RATE

• P.V. OF COST (Rs in Million) 1242.48
• P.V. OF O&M COST (Rs in Million) 184.20
• P.V. OF TOTAL COST (Rs in Million) 1426.67
• TOTAL AADT (Cars Equivallent - Numbers) 39538902

Cont-
Annex- E
To Appendix – III

FINANCIAL ANALYSIS
(BREAK-EVEN TOLL TAX)
 CONSTRUCTION OF 20 KM ROAD

Cost/ Breakeven toll tax Per Vehicle at 8.22 % Discount Rate

Wagon Bus Truck

Items Cars (Rs)
(Rs) (Rs) (Rs)
Capital Cost 31.42 47.14 94.27 125.70
O&M Cost 4.66 6.99 13.98 18.63
Total Cost 36.08 54.12 108.25 144.33
Proposed toll
rate 20.00 30.00 80.00 100.00
Subsidy 16.08 24.12 28.25 44.33
 Annex- F
To Appendix – III
CONVERSION OF FINANCIAL COST INTO ECONOMIC COST
CAPITAL COST - Year 0 (Rs in Million)
Traded Cost Economic Total
Non- Standard Economic
Financial Taxes cost Economic
Item Traded Conversion cost (non-
Cost (%) (traded Cost
% Actual Cost Factor traded items)
items) (Col 6+9)
1 2 3 4 5 6 7 8 9 10
1. Land 150.000 0 0.00 25% 0 150.00 1 150.00 150.00
2. Resettlement 0.000 30% 0.00 15% 0 0.00 0.909 0.00 0.00
3. Road Construction 400.000 30% 120.00 0 120 280.00 0.909 254.52 374.52
4. Consultancies 20.000 100% 20.00 10% 18 0.00 0 0.00 18.00
5. Project Managemnt 5.000 50% 2.50 10% 2.25 2.50 0.909 2.27 4.52
6. Physical Contingencies 28.500 0 0.00 0 0 28.50 0.909 25.91 25.91
7. Price Contingencies 0.000 0 0.00 0 0 0.00 0.909 0.00 0.00
8. Toll Plaza 0.000 25% 0.00 10% 0 0.00 0.909 0.00 0.00
Total 603.50 142.50 140.25 461.00 432.70 572.95
CAPITAL COST - Year 1 (Rs in Million)
1. Land 0.000 0 0.00 0.25 0.00 0.00 1 0.00 0.00
2. Resettlement 180.000 0.3 54.00 0.15 45.90 126.00 0.909 114.53 160.43
3. Road Construction 400.000 0.3 120.00 0 120.00 280.00 0.909 254.52 374.52
4. Consultancies 20.000 1 20.00 0.1 18.00 0.00 0 0.00 18.00
5. Project Managemnt 5.000 0.5 2.50 0.1 2.25 2.50 0.909 2.27 4.52
6. Physical Contingencies 28.500 0 0.00 0 0.00 28.50 0.909 25.91 25.91
7. Price Contingencies 48.000 0 0.00 0 0.00 0.00 0.909 0.00 0.00
8. Toll Plaza 10.000 0.25 2.50 0.1 2.25 7.50 0.909 6.82 9.07
Total 691.500 199.00 188.40 444.50 404.05 592.45
Grand total 1295.000 341.50 328.65 905.50 836.75 1165.40
 Annex- G
To Appendix – III

CALCULATIONS OF ECONOMIC BENEFITS

Cars PICKUP/ BUSES TRUCKS

Details
(Rs) WAGONS (Rs) (Rs) (Rs)
SPEED W / O PROJECT 50 40 35 30
SPEED WITH PROJECT 70 60 55 50
SAVING IN VOC(RS/KM) 1.00 1.28 2.03 2.10
Total savings on VOC 25.00 32.00 50.75 52.50
TIME SAVINGS (MINUTES) 12.86 17.50 21.04 26.00
VALUE OF TIME SAVING(RS) 32.14 35.00 122.73 75.83

• Distance without project 25 KM

• Distance with project 20 KM
• Reduction in distance 5 KM
 Annex- H
To Appendix – III

BENEFITS ON ACCOUNT OF TRAVEL TIME SAVING

CONSTRUCTION OF 20 KM ROAD

(Rs in Million)
YEAR Cars Pickup/ Buses Total
Trucks
Wagons
Time Value Rs. 150/ hr Rs. 120/ hr Rs.350 /hr Rs.175/ hr
1 50.62 21.28 19.72 5.65 97.28
2 53.16 22.35 20.71 5.94 102.15
3 55.81 23.46 21.74 6.23 107.25
4 58.60 24.64 22.83 6.55 112.62
5 61.53 25.87 23.97 6.87 118.25
6 64.00 26.90 24.93 7.15 122.98
7 66.56 27.98 25.93 7.43 127.90
8 69.22 29.10 26.96 7.73 133.01
9 71.99 30.26 28.04 8.04 138.33
10 74.87 31.47 29.16 8.36 143.87
11 77.11 32.42 30.04 8.61 148.18
12 79.43 33.39 30.94 8.87 152.63
13 81.81 34.39 31.87 9.14 157.21
14 84.26 35.42 32.82 9.41 161.92
15 86.79 36.49 33.81 9.69 166.78
16 88.53 37.22 34.49 9.89 170.12
17 90.30 37.96 35.18 10.09 173.52
18 92.10 38.72 35.88 10.29 176.99
19 93.95 39.49 36.60 10.49 180.53
20 95.82 40.28 37.33 10.70 184.14

Annex- J
To Appendix – III
 BENEFITS ON ACCOUNT OF SAVING IN VOC
CONSTRUCTION OF 20 KM ROAD

(Rs in Million)
YEAR
Pickup/ Total
Cars Buses Trucks
Wagons Benefits
Savings/ Km Rs. 1.00 Rs.1.00 Rs. 2.03 Rs. 2.10
1 39.37 19.46 8.15 3.91 70.90
2 41.34 20.43 8.56 4.11 74.45
3 43.41 21.45 8.99 4.32 78.17
4 45.58 22.53 9.44 4.53 82.08
5 47.86 23.65 9.91 4.76 86.18
6 49.77 24.60 10.31 4.95 89.63
7 51.77 25.58 10.72 5.15 93.22
8 53.84 26.60 11.15 5.35 96.94
9 55.99 27.67 11.60 5.57 100.82
10 58.23 28.78 12.06 5.79 104.85
11 59.98 29.64 12.42 5.96 108.00
12 61.78 30.53 12.79 6.14 111.24
13 63.63 31.44 13.18 6.33 114.58
14 65.54 32.39 13.57 6.52 118.01
15 67.50 33.36 13.98 6.71 121.55
16 68.85 34.03 14.26 6.85 123.99
17 70.23 34.71 14.55 6.98 126.47
18 71.64 35.40 14.84 7.12 129.00
19 73.07 36.11 15.13 7.26 131.57
20 74.53 36.83 15.44 7.41 134.21

Annex- K
To Appendix – III

BENEFITS ON ACCOUNT OF FIVE KM REDUCTION IN DISTNACE

 CONSTRUCTION OF 20 KM ROAD

Pickup/ Total
YEAR Cars Buses Trucks
Wagons Benefits
(Rs in Mn) (Rs in Mn) (Rs in Mn)
(Rs in Mn) (Rs in Mn)
Savings/ Km(Rs.) 11.50 9.68 19.79 20.81
1 90.56 29.43 15.90 7.76 143.65
2 95.09 30.90 16.70 8.15 150.83
3 99.84 32.45 17.53 8.55 158.38
4 104.84 34.07 18.41 8.98 166.29
5 110.08 35.77 19.33 9.43 174.61
6 114.48 37.20 20.10 9.81 181.59
7 119.06 38.69 20.90 10.20 188.86
8 123.82 40.24 21.74 10.61 196.41
9 128.78 41.85 22.61 11.03 204.27
10 133.93 43.52 23.51 11.47 212.44
11 137.95 44.83 24.22 11.82 218.81
12 142.08 46.17 24.95 12.17 225.38
13 146.35 47.56 25.69 12.54 232.14
14 150.74 48.99 26.47 12.91 239.10
15 155.26 50.46 27.26 13.30 246.27
16 158.36 51.46 27.80 13.57 251.20
17 161.53 52.49 28.36 13.84 256.22
18 164.76 53.54 28.93 14.11 261.35
19 168.06 54.61 29.51 14.40 266.58
20 171.42 55.71 30.10 14.69 271.91
 Annex- L
To Appendix – III
ECONOMIC ANALYSIS
CONSTRUCTION OF 20 KM ROAD
BENEFITS
CAPITAL O&M TOTAL Reduction Net
YEAR Time
COST COST COST VOC of Total Benefits
Savings
Distance
0 572.95 0.00 572.95 0 0 0 0 -572.95
1 592.45 0.00 592.45 0 0 0 0 -592.45
2 0.00 11.65 11.65 97.28 70.90 143.65 311.84 300.18
3 0.00 11.65 11.65 102.15 74.45 150.83 327.43 315.77
4 0.00 11.65 11.65 107.25 78.17 158.38 343.80 332.15
5 0.00 11.65 11.65 112.62 82.08 166.29 360.99 349.34
6 0.00 58.27 58.27 118.25 86.18 174.61 379.04 320.77
7 0.00 11.65 11.65 122.98 89.63 181.59 394.20 382.55
8 0.00 11.65 11.65 127.90 93.22 188.86 409.97 398.31
9 0.00 11.65 11.65 133.01 96.94 196.41 426.37 414.71
10 0.00 11.65 11.65 138.33 100.82 204.27 443.42 431.77
11 0.00 58.27 58.27 143.87 104.85 212.44 461.16 402.89
12 0.00 11.65 11.65 148.18 108.00 218.81 474.99 463.34
13 0.00 11.65 11.65 152.63 111.24 225.38 489.24 477.59
14 0.00 11.65 11.65 157.21 114.58 232.14 503.92 492.27
15 0.00 11.65 11.65 161.92 118.01 239.10 519.04 507.38
16 0.00 58.27 58.27 166.78 121.55 246.27 534.61 476.34
17 0.00 11.65 11.65 170.12 123.99 251.20 545.30 533.65
18 0.00 11.65 11.65 173.52 126.47 256.22 556.21 544.55
19 0.00 11.65 11.65 176.99 129.00 261.35 567.33 555.68
20 0.00 11.65 11.65 180.53 131.57 266.58 578.68 567.03
21 0.00 11.65 11.65 184.14 134.21 271.91 590.25 578.60
TOTAL: 1165.40 361.27 1526.67 2691.51 1961.65 3974.38 8627.54 7100.87
Cont-
Annex- L
To Appendix – III
ECONOMIC ANALYSIS
CONSTRUCTION OF 20 KM ROAD

RESULTS AT 12% DISCOUNT RATE

• P.V. OF TOTAL COST ( Rs in Million) 1224.27
• P.V. OF BENEFITS ( Rs in Million) 2721.43
• N.P.V ( Rs in Million) 1497.17
• B.C.R. 2.22:1
• E.I.R.R. 26.54%
 Annex- M
To Appendix – III
ECONOMIC ANALYSIS
CONSTRUCTION OF 20 KM ROAD
SENSITIVITY ANALYSIS -10% increase in cost ( Rs In Mn)
BENEFITS
CAPITAL O&M TOTAL Reduction Net
YEAR Time
COST COST COST VOC of Total Benefits
Savings
Distance
0 630.24 0.00 630.24 0 0 0 0 -630.24
1 651.70 0.00 651.70 0 0 0 0 -651.70
2 0.00 11.65 11.65 97.28 70.90 143.65 311.84 300.18
3 0.00 11.65 11.65 102.15 74.45 150.83 327.43 315.77
4 0.00 11.65 11.65 107.25 78.17 158.38 343.80 332.15
5 0.00 11.65 11.65 112.62 82.08 166.29 360.99 349.34
6 0.00 58.27 58.27 118.25 86.18 174.61 379.04 320.77
7 0.00 11.65 11.65 122.98 89.63 181.59 394.20 382.55
8 0.00 11.65 11.65 127.90 93.22 188.86 409.97 398.31
9 0.00 11.65 11.65 133.01 96.94 196.41 426.37 414.71
10 0.00 11.65 11.65 138.33 100.82 204.27 443.42 431.77
11 0.00 58.27 58.27 143.87 104.85 212.44 461.16 402.89
12 0.00 11.65 11.65 148.18 108.00 218.81 474.99 463.34
13 0.00 11.65 11.65 152.63 111.24 225.38 489.24 477.59
14 0.00 11.65 11.65 157.21 114.58 232.14 503.92 492.27
15 0.00 11.65 11.65 161.92 118.01 239.10 519.04 507.38
16 0.00 58.27 58.27 166.78 121.55 246.27 534.61 476.34
17 0.00 11.65 11.65 170.12 123.99 251.20 545.30 533.65
18 0.00 11.65 11.65 173.52 126.47 256.22 556.21 544.55
19 0.00 11.65 11.65 176.99 129.00 261.35 567.33 555.68
20 0.00 11.65 11.65 180.53 131.57 266.58 578.68 567.03
21 0.00 11.65 11.65 184.14 134.21 271.91 590.25 578.60
TOTAL: 1281.94 361.27 1643.21 2691.51 1961.65 3974.38 8627.54 6984.33
Cont-

Annex- M
To Appendix – III
ECONOMIC ANALYSIS
CONSTRUCTION OF 20 KM ROAD

RESULTS AT 12% DISCOUNT RATE

• P.V. OF TOTAL COST ( Rs in Million) 1334.46

• P.V. OF BENEFITS ( Rs in Million) 2721.43
• N.P.V ( Rs in Million) 1386.97
• B.C.R. 2.04:1
• E.I.R.R. 24.51%
 Annex- N
To Appendix – III
ECONOMIC ANALYSIS
CONSTRUCTION OF 20 KM ROAD
SENSITIVITY ANALYSIS (Benefits delayed by one year – Rs in Mn)
BENEFITS
O&
CAPITAL TOTAL VOC Reduction Total Net
YEAR M Time
COST COST of Benefits
COST Savings
Distance
0 572.95 0.00 572.95 0 0 0 0 -572.95
1 592.45 0.00 592.45 0 0 0 0 -592.45
2 0.00 0.00 0.00 0 0.00 0.00 0.00 0.00
3 0.00 11.65 11.65 97.28 70.90 143.65 311.84 311.84
4 0.00 11.65 11.65 102.15 74.45 150.83 327.43 315.77
5 0.00 11.65 11.65 107.25 78.17 158.38 343.80 332.15
6 0.00 11.65 58.27 112.62 82.08 166.29 360.99 349.34
7 0.00 58.27 11.65 118.25 86.18 174.61 379.04 320.77
8 0.00 11.65 11.65 122.98 89.63 181.59 394.20 382.55
9 0.00 11.65 11.65 127.90 93.22 188.86 409.97 398.31
10 0.00 11.65 11.65 133.01 96.94 196.41 426.37 414.71
11 0.00 11.65 58.27 138.33 100.82 204.27 443.42 431.77
12 0.00 58.27 11.65 143.87 104.85 212.44 461.16 402.89
13 0.00 11.65 11.65 148.18 108.00 218.81 474.99 463.34
14 0.00 11.65 11.65 152.63 111.24 225.38 489.24 477.59
15 0.00 11.65 11.65 157.21 114.58 232.14 503.92 492.27
16 0.00 11.65 58.27 161.92 118.01 239.10 519.04 507.38
17 0.00 58.27 11.65 166.78 121.55 246.27 534.61 476.34
18 0.00 11.65 11.65 170.12 123.99 251.20 545.30 533.65
19 0.00 11.65 11.65 173.52 126.47 256.22 556.21 544.55
20 0.00 11.65 11.65 176.99 129.00 261.35 567.33 555.68
21 0.00 11.65 11.60 180.53 131.57 266.58 578.68 567.03
22 0.00 11.60 11.60 184.14 134.21 271.91 590.25 578.65
TOTAL: 1165.40 361.2 1515.02 2691.51 1961.6 3974.38 8627.5 7112.52
7 5 4
Cont-
Annex- N
To Appendix – III
ECONOMIC ANALYSIS
CONSTRUCTION OF 20 KM ROAD

RESULTS AT 12% DISCOUNT RATE

• P.V. OF TOTAL COST ( Rs in Million) 1215.93

• P.V. OF BENEFITS ( Rs in Million) 2429.85
• N.P.V ( Rs in Million) 1226.99
• B.C.R. 2.00:1
• E.I.R.R. 22.49%

93
 Appendix-IV
Example – Social Sector Project
Establishment of a Computer Institute: M/S ABC has planned to establish a
Computer Institute. The project is designed to impart I.T education to the students. The statistical
data provided by the sponsors and used in undertaking the Unit Cost analysis is as follows:
• Capital Cost
Capital Cost
Years
(Rs in Million)
1 40.250
2 75.170
3 45.330
4 38.923
Total 199.673

• Implementation Period: 48 months

• Annual Recurring Cost: Rs. 30 million (including pay of teaching, admin and
supporting staff, utility and repair & maintenance charges, etc.)
• Source of Financing: Federal PSDP
• Number of Students (Year/Faculty wise Enrolment):

2nd 3rd 4th

Field Ist Year
Year Year Year
Bachelor (Computer) 4 years 100 200 300 400
Master (Computer) 2 years 100 200 200 200
Total Students 200 400 500 600

• Income on the Basis of Following Fee Structure:

Source of Income Amount (Rs.)

Admission Fee (Once) 1000.00
Tuition Fee (Per month) 2000.00
Other Charges (Per month) 500.00
Total Fee 3500.00

Annual Revenue
Details / Year st
1 Year 2 Year 3rd Year 4th Year
nd

Admission Fee 0.00 0.00 0.00 0.00

Tuition Fee/month 0.00 0.00 0.00 0.00
94
 Other charges/month 0.00 0.00 0.00 0.00
Total: 0.00 0.00 0.00 0.00

• Life of the Project: 40 years.

• Calculation of Salvage Value and Replacement Cost:
Salvage Value
Items Cost Life Replacement
(Rs in Mn) (Years) Cost (Rs in Mn)
% (Rs in Mn)
Equipments 22.100 10 15 3.315 18.785
Land 10.000 40 100 10.000 0.000
Civil Work 72.000 40 25 18.000 0.000
Vehicles 4.000 5 25 1.000 3.000
Furniture 2.120 5 10 0.212 1.908
Books 2.700 10 10 0.270 2.430
Total: 32.797
Replacement Cost After 5 Years 4.908
Replacement Cost After 10 Years 26.123

• Discount Rate: 8.22 %

Note: In case of projects for strengthening/ expansion of existing institutions the
data analysis may be provided on incremental basis i.e. under 'with' and 'without' project
conditions.

95
 PART-III
CHAPTER-VIII
MONITERING & EVALUATION PROFORMAS

96
 Revised 2005
PC-1 FORM

GOVERNMENT OF PAKISTAN
PLANNING COMMISSION

PROFORMA FOR DEVELOPMENT PROJECTS

(INFRASTRUCTURE SECTORS)

• Transport & Communication

• Telecommunication

• Information Technology

• Energy (Fuel & Power)

• Housing, Government Buildings &

Town Planning

• Irrigation, Drainage & Flood Control

97
 Revised 2005
GOVERNMENT OF PAKISTAN
PLANNING COMMISSION
PC-1 FORM
(INFRASTRUCTURE SECTORS)
1. Name of the project

2. Location

3. Authorities responsible for:

i. Sponsoring
ii. Execution
iii. Operation and maintenance
iv. Concerned federal ministry

4. Plan provision

5. Project objectives and its relationship with sector objectives

6. Description, justification, technical parameters and technology transfer aspects

(enclose feasibility study for projects costing
Rs. 300 million and above)

7. Capital cost estimates

8. Annual operating and maintenance cost after completion of the

Project

9. Demand and supply analysis

10. Financial plan and mode of financing

11. Project benefits and analysis
i) Financial
ii) Economic
iii) Social benefits with indicators
iv) Employment generation (direct and indirect)
v) Environmental impact
vi) Impact of delays on project cost and viability

12. a) Implementation schedule

b) Result Based Monitoring (RBM) Indicators

98
13. Management structure and manpower requirements including specialized skills
during construction and operational phases

14. Additional projects/decisions required to maximize socio-economic benefits from the

proposed project

15. Certified that the project proposal has been prepared on the basis of instructions
provided by the Planning Commission for the preparation of PC-I for
Infrastructure sector projects.

Prepared by _______________________
Name, Designation & Phone #

Checked by _______________________
Name, Designation & Phone #

Approved by _______________________
Name, Designation & Phone #

99
 Revised 2005
GOVERNMENT OF PAKISTAN
PLANNING COMMISSION
Instructions to Fill-in PC-I Proforma(Infrastructure Sectors)

1. Name of the Project

Indicate name of the project.

2. Location
• Provide name of the district/province.
• Attach a map of the area, clearly indicating the project location.

3. Authorities responsible for

Indicate name of the agency responsible for sponsoring, execution, operation and
maintenance. For provincial projects, name of the concerned federal ministry be
provided.

4. (a) Plan provision

• If the project is included in the medium term/five year plan, specify

actual allocation.
• If not included in the current plan, what warrants its inclusion and how is
it now proposed to be accommodated.
• If the project is proposed to be financed out of block provision, indicate:

Total block Amount already Amount proposed for Balance

provision committed this project available

(b) Provision in the current year PSDP/ADP

5. Project Objectives

• The objectives of the sector/sub sector as indicated in the medium term/five year
plan be reproduced. Indicate objectives of the project and develop a linkage
between the proposed project and sectoral objectives.
• In case of revised Projects, indicate objectives of the project if different from
original PC-I.

6. Description and Justification of Project (enclose feasibility study for projects costing
Rs.300 million & above.)

 Describe the project and indicate existing facilities in the area and justify
the establishment of the Project.
 Provide technical parameters i.e. input and output of the project. `Also
discuss technological aspect of the project.
 Provide details of civil works, equipment, machinery and other physical
facilities required for the project.
100
  Indicate governance issues of the sector relevant to the project and
strategy to resolve them.

In addition to above, the following sector specific information be provided

Transport & Communication

• Provide technical parameters i.e. selected design features and capacity of the
proposed facilities alongwith alternates available.

• For roads, provide information regarding land width, geometric and pavement
design including formation width, pavement width.

• Land classification for bridges and culverts.

• Thickness/width of road way on bridges and culverts.

• Design speed, traffic capacity of road in terms of passenger car units per day.

• Saving in distance for diverted traffic. Average daily traffic of motor vehicles
by category as well as the car units be provided.
• In case of improvement within the urban areas, separate traffic counts within
that area should be given. Brief information regarding traffic and pavement
width etc. in adjoining sections should also be given.

•For bridges provide location, total length of bridge, number of spans with
length of each span, width roadway and footpath, type of sub and
superstructure and load classification.
Telecommunication

• Mention alternate means of providing the same facilities (for example microwaves
verses optic fiber cable, underground cable versus overhead cable etc.) and the cost
of each of the alternatives means.

Information Technology

• Provide Hardware specification

• Attach Networking/LAN diagram
• Software requirements
• Availability of services (DSL, Dial-ups, wireless)

Energy (Fuel & Power)

Fuel
• Detailed description of major equipments, items and structure.
• Provide basis of design of the project.
• Indicate alternate technology alongwith the selected one with justification.
• For exploration projects give details of previously work undertaken.

101
 Power
• Give detailed description of major equipment and structure.
• For Hydroelectric projects: Give information regarding geological investigations,
flow duration curve, water storage, estimated monthly kilowatt hours generation
under minimum and average flow conditions and the flow conditions assumed in
the project and operational regime i.e. base load or peak load plant. Rainfall
record, stream flow calculation, hydrograph and other available water data
alongwith siltation problems be provided.
• For thermal projects: Give information on sources and availability of cooling
water and fuel, calorific value, heat rate price (with custom duties and taxes shown
separately) and disposal of ash and effluents.
• Give a comprehensive, comparison of available technology and rationale/criteria
for selection of specified technology.
• Provide analysis of adopted technology with respect to existing system.
• Indicate whether maintenance facilities are available. If not, provide details/plans
for maintenance facilities.
• For transmission and distribution system: Basis of design voltage drop allowance
system stability, reliability, operating voltage, policy regarding reserves, design and
material to be used for supporting structure, average span length and conductor
size, type of spacing.
• Load flow studies for the year in which plant is proposed to be commissioned and
five years thereafter.
• For sub-stations and switching stations: Give location and purpose of each station
KVA voltage, type and structure, number of circuits, type of transformers and
major circuit breakers.
• Load conditions of the existing facilities, in case of extention facilities.
• In case of new projects, loading conditions of sub stations be provided.

Housing, government buildings & town planning

• Provide alternate designs and proposed design features of the project, keeping in view
the income levels, family size of the population to be served alongwith weather
conditions etc.
• Mention the nature and size of land available and indicate whether the design ensures
the most economical use of space.
• Indicate whether the project is in consonance with the master plan of the city.
• Town Planning and covered area parameters/space standards applied in determining
land and flood area requirements.
• Specifications of the civil works.

Irrigation, drainage and flood control

• Provide project areas characteristics in terms of population, climate, geology,

soil, irrigation, ground water, drainage and agriculture (crops, yields etc.)
• For multipurpose projects, provide basis of allocation of costs between
different purposes.
• Engineering projects be supported by technical background data and each
distinct segment of the project be described separately.

102
7. Capital cost estimates

• Indicate date of estimation of Project cost.

• Basis of determining the capital cost be provided. It includes market
survey, schedule rates, estimation on the basis of previous work done etc.
• Provide year-wise estimation of physical activities as per following:

Year-wise/component-wise physical activities

Items Unit Year-I Year-II Year-III

A.
B.
C.

• Phasing of capital cost be worked out on the basis of each item of work as stated
above and provide as per following:

Year-wise/component-wise financial phasing

(Million Rs)
Item Year-I Year-II Year-III Total
Total Local FEC Total Local FEC Total Local FEC Total Local FEC
A.
B.
C.
Total

In case of revised projects, provide

•History of project approval, year-wise PSDP allocation, releases and

expenditure.
• Item-wise, year-wise actual expenditure and Physical progress.
• Justification for revision of PC-I and variation in scope of project if
applicable.
• Item-wise comparison of revised cost with the approved cost and give
reasons for variation.
• Exchange rate used to work out FEC in the original and revised PC-I’s.
8. Annual Operating Cost

Item-wise annual operating cost based on proposed capacity

utilization be worked out for 5 years and sources of its financing.
9. Demand and supply analysis
• Existing capacity of services and its supply/demand
• Projected demand for 10 years.
• Capacity of the projects being implemented in public/private sector.
• Supply – demand gap.
• Designed capacity and output of the proposed project.
10. Financial Plan

Sources of financing
103
 (a) Equity:

Indicate the amount of equity to be financed from each

source
• Sponsors own resources
• Federal government
• Provincial government
• DFI's/banks
• General public
• Foreign equity
• NGO’s/beneficiaries
• Others

b) Debt

Indicate the local & foreign debt, interest rate, grace period and repayment
period for each loan separately. The loan repayment schedule be also annexed.

c) Grants along with sources

d) Weighted cost of capital

11. Benefits of the project and analysis

• Financial: Income to the Project alongwith

assumptions

• Economic: Benefit to the economy alongwith

assumptions

• Social: Benefits with indicators

• Environmental: Environmental impact assessment

negative/positive

Financial/Economic Analysis(wih assumptions)

• Financial analysis

• Quantifiable output of the project

• Profit and loss account and Cash Flow statement
• Net present value (NPV) and Benefit Cost Ratio
• Internal financial rate of return (IFRR)
• Unit cost analysis
• Break even Point (BEP)
• Payback period
• Return on equity (ROE)

104
 • Economic analysis

• Provide taxes & duties separately in the capital and operating cost
• Net present value (NPV) and benefit cost ratio (BCR)
• Internal economic rate of Return (IERR)

• Employment analysis

• Employment generation (direct and indirect)

• Sensitivity analysis

• Impact of delays on project cost and viability

12. a) Implementation Schedule

• Indicate starting and completion date of the project

Outcome
Targets after Targeted
S.No Input Output Baseline
Completion of Impact
Indicator
Project
1
2
3
4
5
.
.
.
.
.

• Item-wise/year-wise implementation schedule in line chart correlated with the

phasing of physical activities.

b) Result Based Monitoring (RBM) Indicators

• Indicate Result Based Monitoring (RBM) framework indicators in quantifiable

terms in the following table.
13. Management Structure and Manpower Requirements

• Administrative arrangements for implementation of project.

• The manpower requirements by skills during execution and operation of the
project be provided.
• The job description, qualification, experience, age and salary of each post be
provided.

105
14. Additional projects/decisions required

• Indicate additional projects/decisions required to optimize the investment

being undertaken on the project

15. Certificate

• The name, designation and Phone # of the officer responsible for preparing
and checking be provided. It may also be confirmed that PC-I has been
prepared as per guidelines issued by the Planning Commission for the
preparation of PC-I for Infrastructure Sector projects.

• The PC-I alongwith certificate must be signed by the Principal Accounting

Officer to ensure its ownership.

106
 Revised 2005

PC-1 FORM

GOVERNMENT OF PAKISTAN
PLANNING COMMISSION

PROFORMA FOR DEVELOPMENT PROJECTS

(SOCIAL SECTORS)

• Education, Training and

Manpower

• Health, Nutrition, Family Planning &

Social Welfare

• Science & Technology

• Water Supply & Sewerage

• Culture, Sports, Tourism &

Youth

• Mass Media

• Governance

• Research

107
 Revised 2005

GOVERNMENT OF PAKISTAN
PLANNING COMMISSION
PC-1 FORM
(SOCIAL SECTORS)

1. Name of the Project

2. Location

3. Authority responsible for:

v. Sponsoring
vi. Execution
vii. Operation and maintenance
viii. Concerned federal ministry

4. Plan Provision

5. Project objectives and its relationship with Sectoral objectives

6. Description, justification and technical parameters

7. Capital cost estimates

8. Annual operating and maintenance cost after completion of the

project

9. Demand and supply analysis

10. Financial Plan and mode of financing

11. Project benefits and analysis

i. Financial
ii. Social benefits with indicators
iii. Employment generation (direct and indirect)
iv. Environmental impact
v. Impact of delays on project cost and viability

12. a) Implementation schedule

b) Result Based Monitoring (RBM) Indicators.

13. Management structure and manpower requirements including

Specialized skills during execution and operational phases

108
14. Additional projects/decisions required to maximize socio-economic
benefits from the proposed project

15. Certified that the project proposal has been prepared on the basis of
instructions provided by the Planning Commission for the preparation of
PC-I for Social Sector projects.

Prepared by _________________________
Name, Designation & Phone#

Checked by _________________________
Name, Designation & Phone#

Approved by _________________________
Name, Designation & Phone#

109
 Revised 2005

GOVERNMENT OF PAKISTAN
PLANNING COMMISSION
Instructions to Fill-in PC-I Proforma(Social Sectors)
1. Name of the Project
Indicate name of the project.
2. Location
• Provide name of District/Province.
• Attach a map of the area, clearly indicating the project location.
3. Authorities responsible for
Indicate name of the agency responsible for sponsoring, execution, operation and
maintenance. For provincial projects, name of the concerned federal ministry be
provided.
4. (a) Plan provision

• If the project is included in the medium term/five year plan, specify

actual allocation.
• If not included in the current plan, what warrants its inclusion and how
is it now proposed to be accommodated.
• If the project is proposed to be financed out of block provision, indicate:

Total block Amount already Amount proposed for Balance

provision committed this project available

(c) Provision in the current year PSDP/ADP

5. Project objectives

• The objectives of the sector/sub sector as indicated in the medium

term/five year plan be reproduced. Indicate objectives of the project
and develop a linkage between the proposed project and sectoral
objectives.
• In case of revised Projects, indicate objectives of the project, if
different from original PC-I.

6. Description and justification of project

 Describe the project and indicate existing facilities in the area and justify
the establishment of the Project.
 Provide technical parameters and discuss technology aspect of the
Project.
 Provide details of civil works, equipment, machinery and other physical
facilities required for the project.
 Indicate governance issues of the sector relevant to the project and
strategy to resolve them.

110
 In addition to above, the following sector specific information be provided

Education, training and manpower

• Give student-teacher ratio for the project and the national average for the proposed
level of education.
• Year-wise proposed enrolment of the institution for 5 years.
• For scholarship projects, indicate number of scholarships to be awarded each year
alongwith selection criteria .
• Provide faculty strength in relevant discipline, in case of expansion of facilities.
• Indicate the extent of library and laboratory facilities available in case of secondary,
college and university education.
• Provide details of technical staff required for operation & maintenance of laboratories.

Health, nutrition, family planning and social welfare

a) Health projects

• Indicate whether the proposed facilities are preventive or curative.

• Bifurcate the facilities between indoor, out door and department-wise.

b) Nutrition

• Indicate the infrastructure and mechanism required for the project.

• Measures taken for involvement and participation of the community.
• Net improvement in the nutritional status of target groups in quantitative terms.

c) Family planning

• Provide information relating to motivation and distribution sub-system.

• Give benchmark data and targets relating to number of couples to be
approached and number of contraceptives and other devices to be distributed.
• Mode/mechanism of advocacy and awareness

Water supply & sewerage

• Present and projected population and water availability/ demand.

• Indicate source and water availability (mgd) during next 5,10,20 years.
• For waste water/sewerage, provide present and future disposal requirements,
gaps if any and proposed treatment methods and capacity.
• Indicate present and proposed per capita water supply in the project area,
comparison be made with water supply in similar localities.
• Indicate whether the proposed project is a part of the master plan. If so,
provide details.
Culture, sports, tourism & youth

• Existing and projected flow of tourists in the country/project area.

111
 • Capacity of existing departments to maintain archaeological sites/museums.
• Relationship of archaeological projects with internal and foreign tourism.

Mass media
• Indicate area and population to be covered with proposed project.
Research
• Indicate benefits of the research to the economy.
• Mention number of studies/papers to be produced.
• Indicate whether these studies would result in commercial application of the process
developed (if applicable).
7. Capital cost estimates
 Indicate date of estimation of Project cost.
 Basis of determining the capital cost be provided. It includes market survey,
schedule rates, estimation on the basis of previous work done etc.
 Provide year-wise estimates of Physical activities by main components
as per following:
Component-wise, year-wise physical activities

Items Unit Year-I Year-II Year-III

A.
B.
C.
• Phasing of Capital cost be worked out on the basis of each item of work as stated
above and provide information as per following.
Year-wise/component-wise financial phasing
(Million Rs)
Item Year-I Year-II Year-III Total
Tota Loc FE Tota Loc FEC Tot Loc FE Tot Loc FE
l al C l al al al C al al C
A.
B.
C.
Total

In case of revised Projects, Provide

 Projects approval history, year wise PSDP allocations, releases and
expenditure.
 Item-wise, year-wise actual expenditure and Physical progress.
 Justification for revision of PC-I and variation in scope of the project if
applicable.
 Item-wise comparison of revised cost with the approved cost and give reasons
for variation.
 Indicate exchange rate used to work out FEC in the original and revised PCI.

8. Annual operating cost

 Item-wise annual operating cost for 5 years and sources of financing .

9. Demand supply analysis (excluding science & technology, research,

112
 governance & culture, sports & tourism sectors
• Existing capacity of services and its supply
• Projected demand for ten years
• Capacity of projects being implemented both in the public & private sector
• Supply – demand gap
• Designed capacity & output of the proposed project
10. Financial plan
Sources of financing
(a) Equity:
Indicate the amount of equity to be financed from each source
 Sponsors own resources
 Federal government
 Provincial government
 DFI's/banks
 General public
 Foreign equity (indicate partner agency)
 NGO’s/beneficiaries
 Others
b) Debt
Indicate the local & foreign debt, interest rate, grace period and repayment
period for each loan separately. The loan repayment schedule be also annexed.

c) Grants along with sources

d) Weighted cost of capital

11. (a) Project benefits and analysis

• Financial: Income to the project alongwith assumptions.

• Social: Quantify benefit to the target group
• Environmental: Environmental impact assessment negative/
positive.
(b) Project analysis
 Quantifiable output of the project
 Unit cost analysis
 Employment generation (direct and indirect)
 Impact of delays on project cost and viability
12. a) Implementation of the project
 Indicate starting and completion date of the project
 Item-wise/year-wise implementation schedule in line chart co- related with
the phasing of physical activities.
Result Based Monitoring (RBM) Indicators
 Indicate Result Based Monitoring (RBM) framework indicators in
quantifiable terms in the following table.
Outcome
Targets after Targeted
S.No Input Output Baseline
Completion of Impact
Indicator Project
1
2
3
113
 4

13. Management structure and manpower requirements

 Administrative arrangements for implementation of the project.

 Manpower requirements during execution and operation of the project be
provided by skills/profession.
 Job description, qualification, experience, age and salary of each job be
provided.
14. Additional projects/decisions required

 Indicate additional projects/decisions required to optimize the investment

being undertaken on the project.

15. Certificate

• The name, designation and phone # of the officer responsible for , preparing
and checking be provided. It may also be confirmed that PC-I has been
prepared as per instructions for the preparation of PC-I for social sector
projects.
• The PC-I alongwith certificate must be signed by the Principal Accounting
Officer to ensure its ownership.

114
 Revised 2005

PC-1 FORM

GOVERNMENT OF PAKISTAN
PLANNING COMMISSION

PROFORMA FOR DEVELOPMENT PROJECTS

(PRODUCTION SECTORS)

• Agriculture Production

• Agriculture Extension

• Industries, Commerce
And Minerals

115
 Revised 2005

GOVERNMENT OF PAKISTAN
PLANNING COMMISSION
PC-1 FORM
(PRODUCTION SECTORS)
1. Name of the project
2. Location
3. Authorities responsible for:
ix. Sponsoring
x. Execution
xi. Operation and maintenance
xii. Concerned federal ministry
4. Plan provision
5. Project objectives and its relationship with sector objectives
6. Description, justification, technical parameters and technology transfer aspects
(enclose feasibility study for projects costing Rs 300 million and above)

7. Capital cost estimates

8. Annual operating and maintenance cost after completion of the
Project
9. Demand and supply analysis
10. Financial plan and mode of financing
11. Project benefits and analysis
i) Financial
ii) Economic
iii) Social benefits with indicators
iv) Employment generation (direct and indirect)
v) Environmental impact
vi) Impact of delays on project cost and viability

12. a) Implementation schedule

b) Result Based Monitoring (RBM) Indicators.
13. Management structure and manpower requirements including specialized skills
during construction and operational phases
14. Additional projects/decisions required to maximize socio-economic benefits from the
proposed project
15. Certified that the project proposal has been prepared on the basis of
Instructions provided by the Planning Commission for the preparation of PC-I for
production sector projects

Prepared by ______________________
Name, Designation & Phone #

Checked by _______________________
Name, Designation & Phone #

116
 Approved by _______________________
Name, Designation & Phone #

117
 Revised 2005

GOVERNMENT OF PAKISTAN
PLANNING COMMISSION
Instructions to Fill-in PC-I Proforma (Production Sector)
1. Name of the Project
Indicate name of the project.
2. Location
• Provide name of district and province.
• Attach a map of the area, clearly indicating the projects location.
4. Authorities responsible for
• Indicate name of the agency responsible for sponsoring, execution, operation
and maintenance
• In case of more than one agency, give their component-wise responsibility.
For provincial projects, name of the concerned federal ministry be provided.

4. (a) Plan provision

• If the project is included in the medium term/five year plan, specify
actual allocation.
• If not included in the current Plan, what warrants its inclusion and how
is it now proposed to be accommodated.
• If the project is proposed to be financed out of block provision, indicate:
Total block Amount already Amount proposed for Balance
provision committed this project available
) Provision in the current year PSDP/ADP.
5. Project objectives
The objectives of the sector/sub sector as indicated in the medium term/five
year plan be reproduced. Indicate objectives of the project and a linkage between
the proposed project and the sectoral objectives.
• In case of revised project, indicate objectives of the project if
different from original PC-I.
6. Description and Justification of Project
 Describe the project and indicate existing facilities in the area and justify
the establishment of the project.
 Provide technical parameters i.e. input and output of the project in
quantitative terms. Also discuss the technology aspect of the project.
 Provide details of civil works, equipment, machinery and other physical
facilities required for the project.
 Indicate governance issues of the sector relevant to the project and
strategy to resolve them.
In addition to above the following sector specific information be provided.
Agriculture Production
For fisheries projects: Give area for fishing and the legal rights to that area; the
availability of trawlers; amount and type of fish likely to be available.
• For forestry projects: Indicate nature and state of existing forests their
growth rate and any problems connected therewith. Give details of species;
118
 rotation and anticipated rotation and volume yield. Indicate availability of
complementary services, e.g., access roads, saw mills etc.
• For livestock projects: Give the livestock situation of the country and
mention any problems connected therewith. Present and future herd size, their
species age characteristics and production capacity.
• For agriculture production projects: Give present and future crop yield,
cropping intensity; land use pattern technological intervention and the basis for
calculation of the future output.
• For all agriculture production sector projects, provide (i) transport,
equipment & field machinery available with the department (ii) effect
• on farm income and basis for pricing of outputs (iii) farm gate and
international prices.

Agriculture extension
 Provide history of extension work in and around project area and justify the
extension work.
 Provide transport, equipment and field machinery etc available with the
department.

Industry, Commerce and Minerals

• Provide installed capacity, proposed expansion and available technologies, the

selected technology and reason for its selection.
• Whether the output is meant for (i) import substitution (ii) meeting domestic
demand or (iii) export oriented.
• In case of exports, give likely markets and their size, competitive prices and cost
of production to justify the project.
• Provide all information under with and without project conditions in case of
BMR & expansion projects.
7. Capital cost estimates
• Indicate date of estimation of project cost estimates.
• Basis of determining the capital cost be provided. It includes market
survey, schedule rates, estimation on the basis of previous work done etc.
• Provide year-wise estimation of physical activities as per following:
Year wise/component wise physical activities
Quantities
Items Unit Year I Year II Year III
A
B
C
• Phasing of capital cost be worked out on the basis of each item of work as stated
above and provide as per following:
Year-wise/Component-wise financial phasing
(Million Rs)
Year-I Year-II Year-III Total
Items
Total Local FEC Total Local FEC Total Local FEC Total Local FEC
A
B
C

119
Total

• In case of revised projects, provide

• Project approved history alongwith PSDP allocations, releases and
expenditure.
• Item-wise, year-wise actual expenditure and Physical progress.
• Justification for revision of PC-I and variation in scope of project if
applicable.
• Item-wise comparison of revised cost with the approved cost and give
reasons for variation.
• Exchange rate used to work out FEC in the original and revised PC-I’s.

8. Annual Operating Cost

Item-wise annual operating cost based on proposed capacity utilization for 5
years.

9. Demand and supply analysis(for Industrial and Agricultural

Production Projects)
• Description of product/services.
• Demand/Supply alongwith unit price for the last five years
• Imports/Exports for the last five years alongwith unit price (if applicable)
• Projected demand/supply for 10 years.
• Proposed year-wise production and unit price of the product.
• Existing and proposed arrangements for marketing.
10. Financial Plan
Sources of financing
(a) Equity:
Indicate the amount of equity to be financed from each source
• Sponsors own resources
• Federal government
• Provincial government
• DFI's/banks
• General public
• Foreign Equity (indicate partner agency)
• NGO’s/Beneficiaries
• Others
b) Debt
Indicate the local & foreign debt, interest rate, grace period and repayment
period for each loan separately. The loan repayment schedule be also annexed.

c) Grants alongwith source

d) Weighted cost of capital

11. Benefits of the project and analysis

• Financial: Income to the project alongwith assumptions

• Economic: Benefit to the economy alongwith

assumptions

120
 • Social: Benefits with indicators

• Environmental: Environmental impact assessment

negative/positive

Financial/Economic Analysis(with assumptions)

Financial analysis
• Quantifiable output of the project
• Profit and loss account and cash flow statement
• Net present value (NPV) and benefit cost ratio (BCR)
• Internal financial rate of return (IFRR)
• Unit cost analysis
• Break even Point (BEP)
• Payback period
• Return on equity (ROE)
Economic analysis
• Provide taxes & duties separately in the capital and operating cost
• Net present value (NPV) and benefit cost ratio (BCR)
• Internal economic rate of return (IERR)
• Foreign exchange rate of the project (Bruno's Ratio) for import substitute and
export oriented projects
Employment analysis
• Employment generation (direct and indirect)
Sensitivity analysis
• Impact of delays on project cost and viability
12. a) Implementation Schedule
o Indicate starting and completion date of the project
o Item-wise/year-wise implementation schedule in line chart co-related with
the phasing of physical activities.

Result Based Monitoring (RBM) Indicators

• Indicate Result Based Monitoring (RBM) framework indicators in

quantifiable terms in the following table.
Outcome
Targets after Targeted
S.No Input Output Baseline
Completion of Impact
Indicator
Project
1
2
3
4
5
.

13. Management structure and manpower requirements

• Administrative arrangements for implementation of project

121
• The manpower requirements by skills/profession during execution and
operation of the Project.
• The job description, qualification, experience, age and salary of each job may
be provided.

14. Additional projects/decisions required

• Indicate additional projects/decisions required to optimize the investment
being undertaken on the project
15. Certificate

• The name, designation and phone # of the officer responsible for preparing
and checking be provided. It may also be confirmed that PC-I has been
prepared as per instructions issued by the Planning Commission for the
preparation of PC-I for Production Sector projects.
• The PC-I alongwith certificate must be signed by the Principal Accounting
Officer to ensure its ownership.

122
 Revised 2005

PC-II FORM

GOVERNMENT OF PAKISTAN
PLANNING COMMISSION

PROFORMA FOR DEVELOPMENT PROJECTS

(SURVEY AND FEASIBILITY STUDIES)

123
 Revised 2005

GOVERNMENT OF PAKISTAN
PLANNING COMMISSION
PC-1I FORM
PROFORMA FOR DEVELOPMENT PROJECTS
(SURVEY AND FEASIBILITY STUDIES)
.

1) Name by which survey/ feasibility will be identified

2) Administrative authorities responsible for

i) Sponsoring
ii) Execution
3) Details of survey/feasibility study

i. General description and justification

ii. Implementation period
iii. Year wise estimated cost
iv. Manpower requirements
v. Financial plan
4) Expected outcome of the survey feasibility study and details of projects likely to be
submitted after the survey.

Prepared by _______________________
Name, Designation & Phone #

Checked by _______________________
Name, Designation & Phone #

Approved by _______________________
Name, Designation & Phone #

124
 Revised 2005
GOVERNMENT OF PAKISTAN
PLANNING COMMISSION
Instructions to fill in PC-II Proforma

1. Name of the Project

Please indicate the name by which survey/feasibility study will be undertaken.

2. Administrative authority

Indicate name of the agency responsible for sponsoring and execution of the
project.

3. Details of survey/feasibility study

• Provide a general description of the aims, objectives and coverage of the

survey/feasibility Study.
• Provide justification for undertaking the survey/feasibility Study. Indicate
whether previous studies in the field have been undertaken. If so, provide
details.
• Indicate duration of study and proposed months of commencement and
completion of the study.
• Provide item-wise/year-wise capital cost estimate of the study broken down
between local and foreign exchange.
• Indicate date on which cost estimates were prepared and the basis of these
estimates.
• Sources of financing the capital cost be provided
• Indicate requirements separately for local and foreign personnel i.e.
professional, technical, administrative, clerical, skilled, unskilled, others
alongwith their terms of reference.
• Indicate the period of contract of both the local and foreign consultants
alongwith qualifications, experience and the terms of their appointment.

4. Expected outcome

• Indicate the expected outcome of the survey/feasibility study in quantifiable

terms. It may also be indicated whether any project will be prepared after
the survey.

125
 PC-III (a) Form
(Revised – 2005)
Government of Pakistan
Planning Commission
Implementation of Development Projects
(Physical Targets based on PSDP allocation)
To be furnished by 1st July of each year
1. Name of the Project:
(Million Rs)
2. Approved Capital Cost:
(Million Rs)
3. Expenditure up to the end of Actual Accrued Total
last Financial Year:
(Million Rs)
4. PSDP allocations for the Total Local FEC
Current year:
5. Annual Work Plan:
As per PC-IAchievements Target for
Item Unit Quantities upto the end current year
of last year

6.Quarterly work plan based on annual work plan:

Item Unit 1st 2nd 3rd 4th

Quarter Quarter Quarter Quarter

7. Cash Plan:
(Rs
Millions)
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter

8. Output indicators:

To be determined by project director on the basis

of indicators given in the PC-I.

(Revised 2005)
126
 Government of Pakistan
Planning Commission
Instructions to fill-in PC-III (a) Proforma
1. Name of the Project:
Indicate name of the project.
2. Approved capital cost:
Provide approved capital cost by the competent forum.
3. Expenditure upto the end of last financial year:
Provide the actual and accrued expenditure upto end of last
financial year.
4. PSDP allocations for the current year:
Provide allocations for the project as shown in the
PSDP/ADP.
5. Annual Work Plan:

 Provide scope of work as indicated in the PC-I by major

items of work.
 Actual physical achievements upto the end of last financial
year against the scope of work indicated in PC-I.
 Physical targets for the year be determined on the basis of
activity chart/work plan to be prepared each year on the
basis of PSDP allocations. (Blank
activity chart/work plan for major items of works enclosed).
6. Quarterly Work Plan:
The quarterly work plan be prepared on the basis of annual
work plan.
7. Cash Plan:
Indicate the finances required to achieve the quarterly work
plan targets as indicated at 6 above.

8. Output indicators:
A number of projects start yielding results during its
implementation. In such projects the recurring cost is
capitalized and the project start yielding results during its
implementation. Indicate quantifiable outcome of the
projects for the current year.

The Proforma alongwith activity chart/work plan has to be

furnished by 1st July of each financial year.

PC-III (B) Form

(Revised – 2005)
127
 Government of Pakistan
Planning Commission

Implementation of Development Projects

To be furnished by 5th day of each month

1. Name of project:
(Million Rs.)
2. Financial Status

((Million Rs)
• PSDP allocations for the
Current year

(Million Rs)
• Current quarter
requirements as per cash
plan

(Million Rs)
• Releases during the
month

(Million Rs)
• Expenditure during the month

3. Physical Status
Physical achievements during the month under report

Item Unit Quantities

4. Output Indicators

5. Issues/Bottlenecks in Projects Implementation

(Revised 2005)

Government of Pakistan
128
 Planning Commission
Instructions to fill-in PC-III(B) Proforma

1. Name of the Project:

Indicate name of the project.
2. Financial status:

 Indicate PSDP allocations for the current year and quarter.

 According to latest instructions of ministry of finance,
AGPR has been directed to release PSDP allocations in the
1st week of each quarter. However in practice, variations in
releases are expected. The executing agency may therefore
provide released amount during the month under report.
 Provide actual expenditure incurred on the project during
the month under report.

3. Physical status:

 Provide actual physical achievements during the month

against targets for the quarter.

4. Output indicators:

 Provide the output of the project during the month under

report against the output targets.

5. Issues/Bottlenecks:

 Indicate the major issues responsible for delay in

implementation of Project at policy and operational level.

The PC-III (B) be furnished by 5th day of each month reflecting

the progress of the project during the last reporting month..

Revised 2005

PC-IV FORM

129
 GOVERNMENT OF PAKISTAN
PLANNING COMMISSION

PROFORMA FOR DEVELOPMENT PROJECTS

(PROJECT COMPLETION REPORT)

From PC-IV
Revised 2005
Government of Pakistan
Planning Commission
To be furnished immediately after completion of Project regardless of
whether or not the accounts of the Project have been closed.

1. Name of the Project:

2. Implementation period:

130
 Commencement Completion
a) As per PC-I:

131
 b) As per actual:

3. Capital cost:

Planned Actual
Rs in Million

4. PC-I phasing/allocations, releases & expenditure:

(Million Rs)
Year Phasing PSDP Releases Expenditure
as per allocations
PC-I
1.
2.
3.
4.

5. Item-wise physical targets and achievements:

Item Unit PC-I estimates Actual achievements

6. Item-wise planned & actual expenditure:

(Million Rs)
Item PC-I estimates Actual expenditure
Total Local FEC Total Local FEC

7. Quantifiable benefits of the Project:

a) Financial
b) Economic
c) Social
d) Employment generated
8. Financial/Economic results based on actual cost:

a) Financial

Net present worth

Benefit cost ratio
Internal financial rate of return
Unit cost analysis

b) Economic

Net present worth

Benefit cost ratio
Internal economic rate of return
For Social Sectors: Provide only unit cost analysis
9. Whether the Project has been implemented as per approved scope of
the project. If not provide details justification of variation.
10. Impact of the Project on target group:
11. Lessons learned in:

a) Project identification
b) Project preparation
c) Project approval
d) Project financing
e) Project implementation
12. Suggestions for planning & implementation of similar projects:
 (Revised 2005)

Government of Pakistan
Planning Commission
Instructions to fill in PC-IV Proforma
1. Name of the project: Indicate name of the project.

2. Implementation period: Indicate planned , commencement and completion date

alongwith actual ones.
3. Capital cost: Provide capital cost of the project as approved by the competent forum
and actual expenditure incurred on the project till preparation of PC-IV.
4. PC-I phasing, allocations, releases & expenditure:
a. Provide PC-I phasing as per approved PC-I.
b. PSDP allocations as reflected in PSDP/ADP.
c. Year-wise releases made to the project.
d. Year-wise actual expenditure incurred on the project.
5. Item-wise physical targets and achievements:

a) Provide item-wise quantifiable physical targets as given in the

approved PC-I.
b) Actual physical achievements against physical targets be provided.
6. Item-wise planned and actual expenditure:

a) Provide item-wise allocations as per approved PC-I.

b) Item-wise actual expenditure incurred on the project be provided.
7. Quantifiable benefits of the project:

a. Provide quantifiable financial benefits of the project alongwith

assumptions/parameters.
b. Quantifiable benefits to the economy alongwith assumptions/
parameters.
c. Social benefits to target group alongwith indicators.
d. Planned and actual employment generated by category
8. Financial/Economic results based on actual cost:

a) Undertake financial, unit cost and economic analysis based on actual

capital and recurring cost. The benefits of the project may also be
calculated on prevailing prices and output.
b) In case of social sector projects, unit cost analysis may only be
provided.
9. Project implementation:

a) Indicate whether project has been implemented as per approved cost,

scope and time. In case of variation, reasons be provided.
10. Project impact:

a) Provide impact of the project on the target group/area.

11. Lessons learned:

a) Provide lesson’s learned during identification, preparation, approval,

financing and implementation of the project.
12. Suggestions:

a) Suggestions for planning & implementation of similar nature of

projects, keeping in view the lessons learned in project
implementation.
 Revised 2005

PC-V FORM

GOVERNMENT OF PAKISTAN
PLANNING COMMISSION

PROFORMA FOR DEVELOPMENT PROJECTS

(ANNUAL PERFORMANCE REPORT AFTER

COMPLETION OF PROJECT)
 From PC-V
Revised 2005
Government of Pakistan
Planning Commission
To be furnished by 31st July of each years for 5 years after
completion of Project indicating Projects operational results
during the last financial year.

1. Name of the Project:

2. Objectives & scope of project as per approved PC-I and state as to what
extent the objectives have been met:
3. Planned and actual recurring cost of the project, with
details:
4. Planned & actual manpower employed:
5. Planned and actual physical output of the project:
6. Planned and actual income of the project:
7. Planned and actual benefits to the economy:
8. Planned and actual social benefits:
9. Planned and actual cost per unit produced/sold:
10. Marketing mechanism:
11. Arrangement for maintenance of building & equipment.
12. Whether output targets as envisaged in the PC-I have been achieved. If not,
provide reasons:
13. Lessons learned during the year in:
o Operation
o Maintenance
o Marketing
o Management
14. Any change in project management during the year:
15. Suggestions to improve projects performance:
 (Revised 2005)
Government of Pakistan
Planning Commission
Instructions to fill in PC-V Proforma

1. Name of the Project:

Indicate name of the project.
2. Objective & scope of the project:
Indicate objectives and scope of the project as stated in the approved PC-I. It
may also be indicated that upto what extent the objectives of the project
have been met.
3. Planned & actual recurring cost:
Provide planned (as per PC-I) and actual recurring cost of the project
alongwith details for the financial year under report.
4. Planned & actual manpower employed:
Provide category-wise details of manpower actually employed for the
operation of the project as compared to proposed in the PC-I.
5. Planned & actual physical output:
Provide output of the project as given in the PC-I for the year under report
and compare it with actual output of the project.
6. Planned & actual income of the project:
Provide income of the project as indicated in the PC-I for the year under
report alongwith assumptions and compare it with the actuals for the year.
7. Benefits to the economy:
Provide quantifiable planned & actual benefits to the economy for the year
under report.
8. Planned & actual social benefits:
Provide social benefits to the target group as given in the PC-I, compare
with the year under report and state to what extent the social benefits have been
achieved.
9. Planned & actual cost per unit produced/sold:
Provide cost per unit produced and sold at the weighted cost of capital of
the project.
10. Market mechanism:
Indicate how the output of the project is being marketed. In case it differs
from the PC-I, the details may be provided.
11. Maintenance of building & equipment:
Provide arrangements made for the maintenance of building & equipment
during the last financial year. It may also be indicated whether annual
maintenance of building & equipment was carried out in the last financial year.
12. Output targets:
Indicate whether output targets as given in the
PC-I for the year under report have been met. In case of variation, give reasons.
13. Lessons learned:
Provide lessons learned during the year under report
i. Operation
ii. Marketing
iii. Management.
14. Change in project management:
In case of any change in the senior management of the project, the details
alongwith justification be provided.

15. Suggestions to improve project performance:

Based on the experience gained during last financial year, suggest
measures to improve the projects performance.
 GLOSSARY OF TERMS

Anecdotal information: Anecdotal information is information that comes in the form of stories
people remember that are relevant to the indicators you are interested in. They do not have scientific
validity, but they can provide useful qualitative information.

Baseline data: Baseline information comes from a study done before an intervention. It provides
you with data (information) about the situation before an intervention. This information is very
important when you get to monitoring and evaluation as it enables you to assess what difference the
intervention has made.

Bottom line: In business, bottom line refers to the bottom line of your profit and loss report – it
tells you whether or not you are making a profit. This is how business assesses success. In
development work, the “bottom line” is -Are we making a difference to the problem or not?

Efficiency, effectiveness, impact: Efficiency tells you that the input into the work is
appropriate in terms of the output. This could be input in terms of money, time, staff, equipment
and so on. Effectiveness is a measure of the extent to which a development program or project
achieves the specific objectives it set. Impact tells you whether or not what you did made a difference
to the problem situation you were trying to address. In other words, was your strategy useful?

Gini distribution of income: The difference between the top end and bottom end of the
economic scale in a society.
Go to scale: Take a project from dealing with small numbers of beneficiaries to dealing with
large numbers of beneficiaries.

Indicators: Indicators are a measurable or tangible sign that something has been done. So, for
example, an increase in the number of students passing is an indicator of an improved culture of
learning and teaching. The means of verification (proof) is the officially published list of passes.

Opportunity costs: Opportunity costs are the opportunities you give up when you decide to do
one thing rather than another. For example, If you spend your money upgrading teachers, you give
up the opportunity of using the money to buy more text books. You have to decide which one is the
better use of the money.

Outputs: Outputs here usually include a draft written report, a verbal presentation, a final written
report in hard copy and electronic form (specifying program compatibility). They can also include
interim reports, interview schedules that must be signed off by the client and so on.

Progress data: This is data (information) that you get during the monitoring of the progress of the
project.

Qualitative: Qualitative data or information deals with how people feel about something,
opinions, experiences, rather than with numbers (quantitative data).
Rigorous: Disciplined, thorough and done with honesty and integrity.

Sampling: Sampling is a way of selecting who to speak to, who to interview, who to survey when
you are doing an evaluation, and cannot cover all the cases that exist.

Secondary data: Secondary data is information that already exists, collected by other people,
organizations. If it comes from your own organization it is primary data. Primary data is
information collected by you – from other project stakeholders, the general population, your own
observation and so on.

Structured, semi-structured or Unstructured interviews: Structured interviews follow

a fixed set of questions, unstructured interviews do not have any pre-prepared questions and semi-
structured combine structured and unstructured, with the interviewer asking some set questions but
adding others in order to follow a line of inquiry that comes up.

SWOT Analysis: Analysis of Strengths, Weaknesses, Opportunities and Threats.

Terms of Reference: Terms of Reference form the basis on which you ask for proposals and
against which you assess what you are getting. They should include: some background to the project
and/or organization, what the purpose of the evaluation is (why you want it done), the key evaluation
questions you want answered, the specific aspects you want included (although this should be open to
negotiation), the kinds of methodologies you have in mind (again, open to negotiation), the outputs
you expect, the time frame for both submission of proposals and for doing the evaluation.

Triangulation: Triangulation is a way of confirming data by using several sources to reflect

on/measure the same thing. For example, if the teachers, learners and parents in a school all praise the
principal for being open-minded, this information is more likely to be acceptable in an evaluation
than if only the teachers said so.

Variable: A variable is a changing element of the situation which may or may not affect
efficiency, effectiveness and/or impact, and which you want to be able to link to other variables in
your indicators. Income level of parents in a school is a variable, so is location in terms of rural or
urban areas.