Sound investment decision–making in the public and private sectors is key to ensuring the sustainable health & growth of the economy. In this Project Appraisal and Risk Management (PARM) program, you will acquire knowledge & tools to conduct project appraisal.
If an important capital project does not achieve the financial and strategic goals of the promoter organisation, it can result in financial losses, waste of resources and impacts across wider reputational spheres. If that failure stems from not applying the tools and techniques of modern project appraisal, risk analysis or project selection, these are avoidable errors.
The decision whether or not to invest a substantial amount in a new capital project can be based on a range of project analysis tools and techniques, backed up by rigorous, systematic evaluation of alternative options, risk factors and funding solutions. The end result is improved decision making and increased effectiveness of projects.
This training seminar will highlight:
- The importance of thorough project appraisal and selection
- The advantages, disadvantages and practical applications of various appraisal methods
- Key economic and financial analysis principles
- Modern concepts of risk assessment and techniques for risk management
- The increasingly important role of public-private partnership (PPP) solutions in delivering successful projects
This Project Appraisal and Risk Management (PARM) program is made up of three modules:
Module 1 – Project Appraisal: Identification, Policy Analysis & Selection
Module 2 – Project Appraisal: Financial and Economic Factors
Module 3 – Project Risk Analysis & Management
Since each Module is focused on a distinct key strategic aspect of project appraisals and risk management, participants can elect to attend only those modules that bear on their own professional involvement (for example, accounting and finance specialists may opt to attend Module 2).
However all three Modules are connected and collectively integrated into an comprehensive overview of the subject matter, with benefits for all participants who need an awareness of the total project environment.
This training course is split in two modules:
MODULE I - Project Appraisal: Identification, Policy Analysis & Selection
MODULE II - Project Appraisal: Financial and Economic Factors
Each modules is structured and can be taken as a stand-alone training course; however, delegates with will maximise their benefits by taking Module 1 and 2 back-to-back as a 2-week training course.
This interactive and practical 3-part training seminar on Project Appraisal and Risk Management, comprising 3 distinct 5-day modules, will provide an insight into how procurement organisations can meet the challenge to pick the best projects against a context of limited resources. It will take you through the key stages of project identification, appraisal and ranking / selection, plus expert guidance on risk assessment and management tools to improve project outcomes.
This Project Appraisal and Risk Management training seminar will focus on the best tools to manage the project appraisal process; identifying, and comparing significant evaluation methodologies ranging from social and developmental policies through environmental and stakeholder factors to the key mechanisms of economic and financial assessment; and systematically exploring the principal risk factors and other key issues that need to be considered in managing the planning of major, long-term, high-value projects.
Exposure to the policy, analytical, economic and funding background for major projects will promote greater understanding of the critical role that project appraisal plays in project procurement.
This Project Appraisal and Risk Management training seminar will conclude with an in-depth review of the most widely used mechanism for major projects, the public-private partnership (PPP) contract; identifying, assessing and allocating the principal issues in adopting a PPP model.
By the end of this training seminar, participants will be able to:
- Describe the principal methods of project appraisal
- Appreciate the suitability of differing appraisal techniques for project types
- Analyse the principal policy, evaluation and economic issues common across major projects
- Identify key risk factors and risk management solutions
- Recognise the benefits of the PPP project model
This Project Appraisal and Risk Management training seminar will utilise a variety of proven adult learning techniques to ensure maximum understanding, comprehension and retention of the information presented. The daily workshops will be highly interactive and participative. This will involve regular discussions on key concept in project appraisal and risk management, the uses and limitations of various techniques, and how best to identify, evaluate, select and structure these high value undertakings.
Application of sound project appraisal and risk management techniques will enable the organisation to forecast potential future conditions that might create strategic opportunities or jeopardise project success, thereby not only maximizing the organisation's return on capital invested in projects, but also improving its reputation for delivering positive outcomes.
By the end of this training seminar, if you have followed all the modules, your contribution to your organisation will have been significantly enhanced. You will be able to:
- Understand the benefits likely to be achieved through projects initiated after proper appraisal and selection processes
- Apply tools and techniques that deploy latest best practices in project appraisal
- Understand economic and financial project appraisal concepts and measures of value
- Discover how to evaluate and compare alternative/competing project investment options, and recommend projects with optimal potential benefits/value
- Understand how to assess and address project risk and uncertainty
- Develop robust structures to bring projects to market
- Maximise the prospects of successful supplier tendering and project delivery
This Project Appraisal and Risk Management training seminar is suitable to a wide range of professionals involved in the development, appraisal, implementation and management of projects. Those with previous experience in project appraisal will be able to share their expertise with others; the broad base of participants ensures that everyone benefits from a wide range of sector and policy perspectives.
This training seminar will particularly benefit:
- Project and Contracts Personnel in both public and private sectors
- Technical Specialists seeking broader perspectives of project planning & implementation
- Government Officials, Ministries, Public Sector Agencies
- Project Financiers, Developers, Sponsors, Consultants
- Risk Management Personnels
- Project Management Professionals
Module 1: Project Appraisal: Identification, Policy Analysis & Selection
DAY ONE: STRATEGIC CONTEXT OF PROJECT DECISION ANALYSIS
- What is Project Management Decision Analysis?
- Project Management Maturity
- Managing Programs and Portfolios
- Strategic Planning and Policy Context
- Typical Project Organisation Structures and Implications for Project Investment Decisions
- Using Subcontractors
- Key Issues Addressed by Project Appraisal
- Market Analysis
- Technical Analysis
- Environmental and Social Analysis
- Understanding Stakeholders
DAY TWO: DEFINING PROJECT SCOPE AND ESTIMATING TIMELINE
- Project Life Cycle
- Project Initiation
- Uncertainty in Project Selection and Planning Decisions, Stage Gate Approach
- Project Trade-offs
- Understanding and Managing Project Scope
- Projecting Project Timeline
DAY THREE: EVALUATING PROJECT COSTS
- Fundamentals of Budgeting and Cost-control
- Estimating Methods
- Dealing with Uncertainty in Estimates
- Resource Allocation and Cashflow Estimates
- Value for Money Decisions
- Important Cost Considerations: Whole of Life Costs, Cost of Quality and Uncertainty
- The Contents of a Project Plan
DAY FOUR: PROJECT ANALYSIS UNDER RISK AND UNCERTAINTY
- Project Risk Considerations
- Risk and Contingency Analysis
- Thought Leadership on Risk and Uncertainty in Projects
- Making Rational Strategic Choices
- Selecting Projects to Meet Organizational Goals
- Decisions under Certainty, Risk and Uncertainty
DAY FIVE: STRATEGIC PROJECT SELECTION
- Project Feasibility Studies – An integrated evaluation
- Introduction to Scenario and Sensitivity Analysis - Decision Trees
- Psychological Aspects of Investment Decisions: Before You Make That Big Decision
- Influencing Investment Decisions
Module 2: Project Appraisal: Financial and Economic Factors
Day Six: SOURCE OF FINANCE
- Potential Funding Sources
- Financing Options:
- Long Term Source of Finance
- Short Term Source of Finance
- Evaluation of the Types of Finance
- Equity Finance
- Debt Finance
- Hybrid Finance
- The Cost of Weighted Average Cost of Capital (WACC)
- Capital Asset Pricing Model (CAPM)
- Measures of Risks
Day Seven: INVESTMENT DECISIONS
- The Most Appropriate Valuation Techniques for Different Economic Sectors
- Applying Time-adjusted Measures
- Social Cost-benefit Analysis in Project Appraisal
- Net Present Value (NPV), Internal Rate of Return (IRR) and Payback Method
- Decision-making using NPV
- Modified Internal Rate of Return (MIRR)
- Integration of Financial, Economic and Social Appraisals to Investment Decisions
- Impact of Inflation on Financial Viability and Risks
- Foreign Exchange Risks
- Financial and Economic Analysis for Selecting a High-quality Project
- Sensitivity Analysis, Scenario Analysis and Simulation
Day Eight: MANAGING, CONTROLLING AND MODELLING CASH FLOW
- Development of the Cash Flow Statement
- Cash vs. Profit
- The Cash Conversion Cycle
- Calculating and Managing the Cash Flow Cycle
- Cash Flow Ratios
- Working Capital Ratios
- The Cost of Maintaining Working Capital
- Maintaining the Optimum Level of Working Capital
- Preparing a Monthly Cash Flow Forecast
Day Nine: THE CHALLENGE OF FINANCIAL ECONOMIC DECISION-MAKING
- The Practice of Financial / Economic Analysis
- The Value-creating Company
- Corporate Value and Shareholder Value
- A Dynamic Perspective of Business
- The Agency Problem and Corporate Governance
- What information and data to use?
- The Nature of Financial Statements
- The Context of Financial Analysis and Decision-making
Day Ten: REVISIT THE KEY CONCEPTS IN DECISION MAKING
- Course Summary and Checklists
- Cash Budgets & Capital Budgets Reviewed
- Financial Skills and Further Development
- Re-visit Cash Flow Management
- Key Challenges in Decision making
Module 3: Project Risk Analysis & Management
Day Eleven: Project Structure Selection
- Planning Structures for Delivering Projects
- Defining a risk tolerance baseline for all activity, plus incremental procedures for high-value, complex projects
- Scaling risk management to the size and complexity of a programme or project
- Project structures to address risks from the points of view of:
- Sponsors
- Lenders
- Investors
- Contractors
- Concession Contract Models
- Foreign Direct Investments
- Joint Ventures
- Service Outsourcings
- Keeping Structures & Financing Flexible to Accommodate Changes
Day Twelve: Risk Identification & Assessment
- Risk Identification
- Developing a Risk Matrix with Risk Ratings based on Probability and Impact
- Types of Risk
- Hazard Risks
- Financial (business) Risks
- Operational (technical) Risks
- Strategic Risks
- Internal & Finance Risks
- External Risks
- Risk Assessment / Analysis
- Sensitivity Analysis – (“what if analysis”)
- Identifying Risks
- Identifying the Impacts of Risk
- Estimating the Likelihood of Risks Occurring
- Estimate the Cost of Risk
- Risk Response / Mitigation Planning
- Monitoring and Communicating Risk
Day Thirteen: Risk Management
- Objective of Project Risk Management
- Tools and Techniques for Risk Management
- Avoidance – modifying a project plan
- Transference – shifting consequences and responsibilities
- Mitigation – preventative action
- Acceptance – accepting risk outcomes
- Limitations of Risk Management
- Use of Insurance & External / 3rd Party Mechanisms in Risk Strategies
- Constructing a Risk-adjusted Project Cost Model
- Using Risk Factors to Test Affordability
- The Roles of Incentives, Sanctions and Risk Sharing
- Using Project Design, Financial and Organisational Arrangements as Risk Management Tools
Day Fourteen: The PPP Contract Model
- The General Principles of How Project Appraisal, Selection, Design and Risk Management ensure more measurable, controllable, successful projects
- What are Public-Private Partnerships (PPPs)?
- The Dynamics of PPPs & How Key Risk Areas can be Managed
- Use of PPPs in Different Sectors and Services
- The Roles and Relationships of Public and Private Parties
- Principal Ways PPP Contracts Can Be Properly Managed
- What are the Lessons for Adopting and/or Adapting PPP Models Across Future Projects?
Day Fifteen: Project Funding Solutions
- Embedding Risk Management into Normal Operations
- Allotting Appropriate Resources for Risk Management Activities
- Integrating Risk Management into Project Protocols and Controls
- Risk Management Monitoring and Control throughout the Project Lifecycle to Improve and Guide Risk Management Processes
- Evaluating Effectiveness of Risk Response Actions (and making adjustments within the project cycle)
- Summaries of Conclusions and Group Discussions
