ABSTRACT
Project identification is considered in Chapter 3. It starts by determining the Owner’s project objectives, based on an understanding of its organisation and the relationships between the participants and their functions. The project constraints must be considered – the upper limit on the necessary resources. Evaluation criteria for the preliminary appraisal must be determined: satisfaction of the project objectives and the measures of comparison, such as economic, financial, environmental, social and political criteria. Market analysis is necessary to establish that there is demand for the project’s products. The financial conditions and the Owner’s financing will affect possible options. Various project options can be devised in concept, each meeting the objectives which are then compared. Preliminary appraisal of each of the options requires assessment of: technical feasibility; outline costs; project planning; environmental issues; social impact; and permitting. Weighing up all the factors identifies which options should be included in the feasibility studies. Successful planning, design and construction of a capital project depends on identifying and managing risk; risk analysis during project identification is important to identify the various risks that could affect the timing and cost of the project, and to provide for appropriate contingency allowances. Various qualitative and quantitative risk analysis techniques are discussed.
