Project Planning in Nepal

Project planning is concerned with the development of a project for investment. It consists of:

• Feasibility study to determine project implementability.
• Appraisal to evaluate project's ability to succeed, and
• Detailed engineering design and estimating to plan project implementation.

Most central level development projects in Nepal are planned by the donors. Most local level projects, however, are planned within the country by various agencies of the government or local authorities.

• National Planning Commission (NPC) is responsible for preparation of five year development plan. Projects are the primary means of translating development plans into action. NPC is responsible for identification, planning, monitoring and evaluation of development projects.
• Central level projects should have approval of NPC. Local level projects should have approval of the Secretary f the concerned Ministry within the policy guidelines of NPC. The project approval is based on the appraisal of the project proposal. A format has been prescribed for preparing project proposal. A process has also been prescribed for approval of the project.

Contents of Project Proposal
The project proposal should contain the following information:

1. Outline of the Project: Objectives, location, duration.
2. Total Investment of the Project: Development, construction, operation, others.
3. Sources of Funds: Government, donors-loan, grant.
4. Returns from the project:
• Contribution to production increase
• Growth in employment
• Internal rate of return
• Other Economic and social benefits
5. Economic Analysis of the Project:
• Cost/benefit ratio
• Cost effectiveness estimates
6. Project Implementation: Schedule and budget.
7. Implementation Requirements: In terms of -
• Human Resources
• Construction materials
8. Project Operations: After completion and handover of project:
• Management arrangements
• Expenditure estimates for 3 years
• Income estimates for 3 years
• Approval of the Project

Project Approval
The project approval process is based on:

1. Consideration of project's fit with national objectives and sectoral strategies. If it is not included in the periodic plan, NPC concurrence should be obtained.
2. Recommendation of department head about the reasonableness of project costs in terms of current prices and cost benefit analysis.
3. The concerned ministry should approve and implement the project keeping in view the concurrence of NPC.

•  If the project is not included in the periodic plan or if the financial outlay is going to increase, the concurrence of NPC and Finance Ministry is needed.
• If the opinions of NPC and Finance Ministry differ, the project should be forwarded for cabinet approval along with project operation plan.