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Local Administrative Entities Development Agency- LODA

METHODOLOGY FOR ANALYSIS


OF FEASIBILITY STUDIES

SID3- GOPA
July 2016
Importance of analysing FS

It is important for LODA to ensure good quality of The quality of the FS will determine the rate of
Feasibility Studies for LG Projects success of LG projects.
The four components of a Feasibility Study

01 Technical

02 Environmental

03 Social

04 Economical & Financial


+ General Information like:
Logframe, Development of different options, Stakeholder Coordination, Implementation Agenda etc.
FS Technical Component

Check
List
1. Needs Assessment is performed
2. Site Location is identified (with alternatives if Applicable)
3. Site Location(s) conformity with spatial plans checked
4. Different technical solutions are studied
5. The Dimensioning of the facility is explained and based on
detailed need assessment or market study
6. Preliminary Technical Design with plans provided for
preferred option
7. Information to connect to utilities (water, electricity, access
road) is provided
FS Environmental Component

Check
List
8. Project Brief for REMA included

9. Environmental Impacts and Risks identified

10. Corrective Actions and Mitigation Measures


included
FS Social Component

Check
List
11. Primary & Secondary
users identified
12. Positive impacts
identified
13. Negative impacts identified
(including Expropriations)

14. Mitigation measures for


negative impacts presented
(including Expropriations)
FS Economical and Financial Component

Check
List 15. Cost Structure
of Capital
Investment
16. Operation &
Maintenance
Costs
17. Revenues/
Benefits
18. Management
Model
19. Financial Risks
Evaluation
FS Other General Information

Check
List
20. Logframe for the project provided

21. Project Implementation Calendar

22. Are the data of the FS reliable and calculations realistic

23. Stakeholders Role and Coordination


24. Different options presented with advantages and
disadvantages for each option and recommendations
25. Sufficient consultative meetings organized during FS
and list of meetings provided
Overall Assessment of Feasibility Study

Recommendations to
improve the FS
5 Overall assessment
of FS quality
Identification of the
4
Weaknesses of the FS
3 Identification of Strengths
of the FS
Checklist of FS filled 2

1
Sample of Feasibility Studies analysed (July 2016)
Number of
Sector Feasibility Study
Analyzed
Agriculture 2
Environnemental
Natural Ressources
2
Private Sector
7
A sample of 16 Development
Water & Sanitation 2
Feasibility Transport 3
Studies was Total 16
analyzed Agriculture
Transport Environmental
12%
19% Natural
Ressources
Water & 12%
Sanitation
13%

Private Sector
Development
Sectors of the Feasibility Studies Analyzed 44%
FS 1: “Banana Paper Industry LTD “ in Rwamagana District
Consultant and date of FS Tangira Ltd, (March 2015?)
Score at Checklist 40% only of checklist elements provided
Estimated Cost 6,359 Million Rwf
Identification of This project seems to be a good idea as there is a need
Strengths of the FS for paper, there is no such facility yet in Rwanda and
that it will generate revenues for farmers and create
new jobs. The stakeholders to develop the project are
identified.
Identification of the The FS is quiet weak and not detailed enough to
Weaknesses of the FS appreciate fully the feasibility of the project. No
Environmental assessment is included. No alternatives
(like a smaller plant) are provided and in the risk
assessment the risk of power cuts is not evaluated.

Overall quality of the FS Average but incomplete


Recommendations to Complete the FS as per the technical recommendations
LODA Management and as per the FS Guidelines. (Study technical
alternatives. Identify different Location for project
implementation. Include Environmental Assessment.
Provide plans of technical design of the preferred
option.)
FS 2: “Construction of a Landfill in Muhanga District“
Consultant and date ECBTP Int. April 2014
Estimated Cost 769 Million rwf
Score at Checklist 24% of checklist elements provided
Site Plan with Satellite picture; Technical Plans, BOQ; Technical Study Report
Identification of is provided; Topographic map of the site is provided. Description of different
Strengths of the FS facilities/building. Geotechnical test provided ; Capital Cost Estimate
Included (769 Million Rwf)
Interpretation of geotechnical test missing. why this site has been chosen?
No alternative solutions studied; What is the lifetime of the facility? No
environmental impact assessment. No assessment of the current situation.
Identification of the The overall socio-economic assessment provided is too general and not
Weaknesses of the relevant to the project like: " Concerning sport, the youth of the district of
FS Muhanga account 21 football teams, 5 volleyball team, 3 basketball and 2
handball teams" . Some statement in the report are not scientific and not of
professional quality like: "The majority of young people in the district of
Muhanga are idle.“ No inclusion of O&M costs.
Overall quality Poor

Recommendations Ask for the FS to be redone according to FS standards including all aspects
to LODA Mngt especially the environmental aspect.
FS 3: “Development of Tourism and Operation Plans for the Twin Lakes “ in Burera,
Gicumbi, Musanze Districts
Consultant and date Horwath HTL, 30th April 2014
Estimated Cost 5,514 Million Rwf
Score at Checklist 36% of checklist elements provided
Identification of SWOT analysis, Road Map (p88), analysis of locations with less slops
Strengths of the FS (p32), site plan are provided; a general environmental assessment is
provided p32; Calculation of total investment cost including part for
public and private sector, estimate of number of tourists and room
nights per year, lump sum for provision of access road, electricity and
water
Identification of the Design of facilities, alternative sites and options not explored.
Weaknesses of the Musanze Cultural Tourism Village is not well explained (only one
FS page). No specific environmental impact assessment. No elements for
the calculation of number of tourist and no market surveys; the
investment cost is very high especially for the government and it is
not sure that the concept of vacation village will work in Rwanda.
Private Public Partnership not described.
Overall quality of FS Poor
Recommendations to Ask the FS to be redone with alternative concepts/ solutions and with
LODA Management a full environmental impact assessment; perform a FS for each
project.
FS 4: “Mwima Cultural Village Project“ in Nyanza District
Consultant and date Consultant: ? Date: March 2015
Estimated Cost 861 Million Rwf
Score at Checklist 36% of checklist elements provided
Identification of general need assessment performed;
Strengths of the FS site location defined, 3D rendering;
description of the different facilities done,
list of potential environmental impact provided p 20
Identification of the No alternative site studied and no technical alternative; the dimensioning of the facilities is not
Weaknesses of the FS explained, no description of the staff organizational structure and program to run the facility; list
of environmental impacts is a copy paste and is not specific to this project; the impacts are not
quantified; expropriation details not provided; training program and capacity building of young
professional not included; it is also not explained how the local community will benefit from the
cultural heritage knowledge and how they are included in the project; market survey not
performed; the target group is not very clear (is this facility for tourists visiting the gorillas, other
kind of tourists, locals?); will there be enough tourists to sustain 84 permanent jobs and 3000
temporarily job; how was the number of tourists calculated; why is the main bungalow
dimensioning for 1000 persons?; The maintenance costs are not presented
Overall quality of FS Poor
Recommendations to The idea is good and the area of Nyanza is appropriate for this type of project. However it appears
LODA Management that the study is too optimistic regarding economic viability and the investment cost is too high in
regard to the expected revenues. Maintenance cost have not been included in the calculation. It is
FS 5: “Rice Processing Plant“ in Nyamasheke District
Consultant and date Consultant: Land Husbandry and AgriProduction Company Ltd
Date: November 2014
Estimated Cost 380 Million Rwf
Score at Checklist 39% of checklist elements provided

Identification of Strengths General Need Assessment performed as well as questionnaires; identification of cultivated
of the FS areas (361 ha + 174 ha); conditions to select the right location of production plant presented p
19; name and specification of equipment presented; management structure organizational
chart provided; capital investment cost provided p23, source of financing identified, cash flow
provided p27 including maintenance
Identification of the Results of questionnaires not presented, site location of transformation plant not provided; no
Weaknesses of the FS alternative solutions; organization of the maintenance for the new equipment not provided;
Need to evaluate the environmental impacts of the project especially: the impact on the
extension of the cultivation into the marshland regarding the fauna and flora of the wetlands.
As well as what are the effects of the fertilizers on the rivers and ponds and aquatic life. What
are the exact benefits for the farmers. Will they benefit from the transformation plan and by
how much?
Overall quality of FS Poor
Recommendations to LODA Upgrade the FS with better socio economic study (farmers) and environmental impact
Management assessment as well as technical plans of the processing plant
FS 6: “Construction of an integrated craft production
center Agakiriro“ in Gicumbi District

Consultant and date Consultant: RBCE Date: March 2015


Estimated Cost 584 million Rwf
Score at Checklist 28% of checklist elements provided
Identification of Strengths The preliminary detailed design; 3D views of the facility; technical specifications; general
of the FS environmental risks are identified and some mitigation measures proposed; Good social
recommendation to include local population participation in the project (p53)

Identification of the No need assessment performed,; no alternative site and solution presented; Dimensioning
Weaknesses of the FS not explained (for example why 400 business units?); No technical mention of utilities.
Number of houses to be expropriated not specified. The FS should avoid to use sentences
like: "The positive benefits are outweighing any environmental impacts created by their
implementation" (p30)
No financial and economomic study.
Overall quality of FS Poor
Recommendations to LODA Redo the FS with proper Need Assessment, Study of different options and dimensioning,
Management consultation with different stakeholders and Economic Study including calculation of
revenues and jobs expected to be generated
FS 7: “Rehabilitation Selling Point Buyungu“ in
Ngororero District

Consultant and date Consultant: Gem Company Ltd Date: October 2014
Estimated Cost 84 Million Rwf
Score at Checklist 40 % of checklist elements provided
Identification of Strengths Need assessment partly explained by the fact that market cannot operate when it is raining.
of the FS Project Capital Investment Provided. Mention of operation and maintenance costs.
Information provided on the expected generated revenues with Tax collection and space
renting.
Identification of the location of existing markets and status missing (modern market, market with no of few
Weaknesses of the FS infrastructure). Location of parking spaces not specified. Site map showing geographical
location of site not provided. No alternative solutions proposed and studied. Information for
the connection to the electricity and water not provided. Few Environmental
Recommendations for during the construction but not environmental impact assessment of
the project. No economical study on the impact of jobs and sales for this selling point.
Overall quality of FS Fair
Recommendations to LODA Overall quality of FS satisfactory even if some aspects could be improved.
Management
FS 8: “Rehabilitation AEP RUSHISHI-RUBONA“ in Ngororero
District

Consultant and date Consultant: High Fidelity Company Date: November 2014
Estimated Cost 172 Million Rwf
Score at Checklist 58 % of checklist elements provided
Identification of Strengths Map showing geographical location of the project. Good problem statement and need
of the FS assessment. Good calculation of the need increase based on the population increase. Good
technical assessment of the condition of the existing water system. The environmental
impact is performed even if not very exhaustive. Assessment of beneficiaries performed.
General information of living condition of population provided. Quick estimation of expected
revenues provided
Identification of the Site plan with plots numbers and if expropriation requirements if any.
Weaknesses of the FS No alternative technical solution studied.

Overall quality of FS Good


Recommendations to LODA Proceed with detailed design
Management
FS 9: “Construction de l’adduction d’eau potable
Gahama-Bitabage “ in Ngororero District

Consultant and date Illumination Construction Co. Ltd Date: November 2014
Estimated Cost 56 Million Rwf
Score at Checklist 46 % of checklist elements provided
Identification of Strengths Description of Infrastructure; Site Plan; need assessment.
of the FS The project will benefit for women and children.
Cost of operation provided; different scenarios for different water price.

Identification of the Differences and contradictions in the figures and number provided (especially for the
Weaknesses of the FS number of beneficiaries p39, p44, p47, p63.
Environmental Aspect not provided.
Socio-economical study not provided. Beneficiaries not well identified (discrepancies)
Overall quality of FS Fair
Recommendations to LODA Proceed with detailed design but ask for a better assessment of beneficiaries and
Management protection of the water source.
FS 10: “ Construction project of Umukore wa Rwabugili
(Phase II ) “ in Ngororero District

Consultant and date Consultant: Ocos Company Ltd Date: December 2015
Estimated Cost 267 Million Rwf
Score at Checklist 16 % of checklist elements provided
Identification of Strengths
Technical Plans; Location provided.
of the FS Capital Investment cost provided.
Identification of the no need assessment; no alternative solutions; no mention of connection to utilities. The
Weaknesses of the FS environmental aspect is not included. The social aspect is not studied. Expropriation needs
are not mentioned.
Operation and Maintenance Costs study is missing;
Overall quality of FS Very Poor
Recommendations to LODA Redo the FSs following the guidelines with Need assessment, logframe, identification of
Management beneficiaries, environmental impact, revenue generated, socio-economical impact, O&M
cost etc.
FS 11: “Rehabilitation of Gatumba-Nyange Road 23.3
Km“ in Ngororero District

Consultant and date Consultant:High Fidelity Company Date:


Estimated Cost 3,446 Million Rwf
Score at Checklist 43% of checklist elements provided
Identification of Strengths Information provided in "Rapport Technique"; Comparison with other alternative solution
of the FS (asphalt bi-couche); problem statement given: description of road defects and problems;
schema itineraire with reference of works by PK.
Environmental Impact Assessment Study Provided.
Project Capital Investment Provided. Comparison with asphalted road (bi-couche) provided.
Identification of the No map showing location of the road. Traffic data not included in the main report. No
Weaknesses of the FS Socio-economic Impact Assessment. Some costing elements regarding maintenance but no
precise multiyear maintenance plan.
Overall quality of FS Fair
Recommendations to LODA Some important information missing like: socio-economical study on the road impact for
Management the communities and prioritization of this road and maintenance costs. Otherwise can
proceed with detailed technical design
FS 12: “Rehabilitation of Rusumo-Gitega-Kayebe-
Gashubi Road (20.58 Km) “ in Ngororero District

Consultant and date Consultant: High Fidelity Company Date: October 2015
Estimated Cost 2,591 Millions Rwf

Score at Checklist 38% of checklist elements provided

Identification of Strengths
Good technical design. The problem statement and need assessment are well described.
of the FS Location of quarries identified.
Identification of the The technical study is of good quality but the report is full of copy and paste of formulas
Weaknesses of the FS and classbook explanations. site plan showing geographical position of the project. he
environmental impacts specified in the study are general and not quantified specifically for
the road. Amount and location of expropriation not specified. Few social aspect are
described but are not studied specifically for this project. No mention of operation and
maintenance costs
Overall quality of FS Poor
Recommendations to LODA Proceed with Detailed design but ask High Fidelity Consultants to follow the FS guidelines
Management next time and to include the socio-economical aspect as well as cost for Maintenance and
some proposed alternatives on technical solutions.
FS 13: “Rusumo Modern Market“ in Ngororero District

Consultant and date Consultant: Gem Company Limited Date: October 2014
Estimated Cost 629 Million Rwf
Score at Checklist 28% of checklist elements provided

Identification of Strengths Plot of land and location identified; 3D plans. Geotechnical test performed.
of the FS The houses to be expropriated are identified; The need assessment is well performed with
a survey of 29 persons. Capital cost Investment;
Identification of the Indicates that 3 sites were considered to build the market but its not explained why this site
Weaknesses of the FS was selected.
No presentation of alternative solutions; no interpretation of geotechnical test; No
explanation of dimensioning.
Expected generated revenues estimated but there are some mistakes in the calculation
which need to be corrected. O&M costs not included. Environmental aspect is not taken
into account.
Overall quality of FS Poor
Recommendations to LODA Redo the FS
Management
FS 14: “Nyange Selling Point “ in Ngororero District

Consultant and date Consultant: OBC Date: November 2015


Estimated Cost 78 Million Rwf
Score at Checklist 20% of checklist elements provided

Identification of Strengths of Project located near an existing selling point which needs to be upgraded; identification of
the FS customer performed; technical design provided. Some environmental problems identified
during construction; Capital Investment Cost Provided;
Identification of the No alternative solution explored; explanation of dimensioning not provided; location map not
Weaknesses of the FS provided; information not provided on how to connect to utilities; lot of technical information
which are not relevant to feasibility study. No identification and evaluation of risks during
operation; waste management. No mention of O&M costs nor calculation of estimated
revenues. Social Component not assessed. No information on expropriation needs.
Overall quality of FS Poor
Recommendations to LODA Project is probably Feasible because there is an existing selling point. However the FS lacks of
Management many aspects. Next FS should follow FS Guidelines and Checklist.
FS 15: “CONSTRUCTION OF KIVUGIZA-RUGARAMA RAVIN“ in
Nyarugenge District

Consultant and date Consultant: Innovation Co. Ltd. Date: March 2015
Estimated Cost 464 Million Rwf
Score at Checklist 24 % of checklist elements provided

Identification of Strengths of Good identification of erosion problems; topo map is precise; technical plans provided;
the FS hydrological study conducted. Capital Investment Cost;
Identification of the No alternative solutions; no need assessment; some mistakes with the numbers (67.49 Ha does
Weaknesses of the FS not correspond to 6749 m2 for example); general technical consideration not appropriate for a
FS; Environmental Aspect Not Provided. No identification of risks; No impact identification and
evaluation (especially to what will happen downstream). Social aspect not studied for the area
of the project. Only general statistics of Nyarugenge District. O&M costs
Overall quality of FS Poor
Recommendations to LODA This is a technical study and not a FS. The FS should be redone following guidelines exploring
Management different technical options and studying the impact downstream the drain.
FS 16: “Construction of an earth road: Ruliba-
Mwendo-Akisigiro “ in Nyarugenge District

Consultant and date Consultant: Innovation Co. Ltd Date: March 2015
Estimated Cost 1,070 Million Rwf
Score at Checklist 45 % of checklist elements provided

Identification of Strengths of traffic count; geotechnical tests with interpretation; technical risks identified; Road beneficiaries
the FS identified; it is specified that the project will not require any specification; identification of
disturbance for population during construction especially digging of material. Stairs created
when crossing a water stream for the use of the population. Capital Investment Cost (divided in
3 lots)
Identification of the Need assessment partially performed; where are the plans showing longitudinal section; any
Weaknesses of the FS topographic survey performed? compensation measures specified but not detailed (just
general). What is the impact of taking sand in the river? compensation measures for
disturbance during construction not provided. O&M costs not provided.
Overall quality of FS Poor
Recommendations to LODA This is a technical study and not a FS. The FS should be redone following guidelines exploring
Management different options and performed the need assessment. The traffic is very small why has this
road been selected? What are the criteria for prioritization?
COMPLIANCE OF FS ANALYSED VS CHECKLIST
Compliance of FS
(from sample) with Compliance of FS (from sample) with Checklist
Checklist (all sectors) by Sector
100% 100%

80% 80%

60% 60% 52%


34% 42%
40% 40% 36%
29%
24%
20% 20%

0% 0%
Water & Private Sector Environmental Agriculture Transport
Sanitation Development Natural
Ressources
OVERALL QUALITY OF FS ANALYSED

Quality of FS analysed
(Sample of 16 Studies)
6%

Good Average investment cost


19%
Fair around 1.3 Billion Rwf by
Poor project
75%
COMMON ISSUES IN FS ANALYSED
Poor Need Assessment & Dimensioning
01 The Need Assessment is often not well performed.
The Dimensioning is often not based on detailed survey/
analysis

No Alternative Solutions & No Consultation Process


02 There should not be only one solution defined by the
consultant but different options that can be discussed during
consultations of stakeholders.

Poor Environmental Impact Assessment


03 The environmental impact assessment should be specific
to the project type and assess the risks and present the
mitigation measures.
ISSUES Ctd
Poor Socio-Economic Impact Assessment
04 Expropriation details should be presented
Positive Socio-Economic impacts should be evaluated

Lack of information on Facility Operation

05 Management System and Maintenance Costs


It should be specified how the facility will be operated
and maintained (multi-annual maintenance plan).

06 Utility Connections (Water, Electricity,


Access Road) often forgotten

07 Confusion between FS and Technical


Design
SOLUTIONS AND WAY FORWARD

1 2

TRAINING OF DISTRICT LODA TO ANALYSE DISTRICT FS


STAFF ON FS GUIDELINES AND PERFORM QUALITY CHECK (WITH
& CHECKLIST)
FOLLOW UP ON THE &
IMPLEMENTATION PROVIDE ADVICES AND
RECOMMENDATIONS TO DISTRICTS
MURAKOZE