Capital Intensive Project

Capital intensive project refers to the project which uses more capital, technology and skill manpower to complete the project within specified parameters (time, cost and quality). It require large amount of capital and less workforce in comparison to labor intensive project. It means, capital used in per unit of output is larger than the same unit in labor intensive project.

Generally capital intensive projects are profit oriented. It's task are complex in nature. So advance technology like automation, computerization, robotization and information is extensively used on capital intensive project. It makes the project less costly in long run. It is better technique for qualitative and mass production. Mostly it uses high skill technical and professional manpower. But it does not provide employment opportunities to all types of work force in society. It violates social equality and justice.
 

Capital intensive projects are appropriate to implement in those countries where availability of sufficient capital for investment, well technological development, availability of well skilled manpower and high level cost due to labor shortage. However it helps to improve the economic condition of developing country rapidly.

Advantages of Capital Intensive Project:

• It produces greater quality output.
• It is less time consuming than labor based technique.
• It is less costly in long run.
• It is best suited for handling complexity.
• It increases the export trade.
• It helps to develop technology.
• It makes possible optimum utilization of resources.
• It contributes in rapid economic growth of a country.
• It promotes skill and knowledge.

Disadvantages of Capital Intensive Project:

• It ignores human factors.
• It needs huge amount of capital for investment.
• It uses expensive technology.
• It may adversely affect the balance of payment due to huge enforcement of large machinery, equipment and technology.
• It reduces the employment opportunity.
• It may create the situation of social injustice due to unequal distribution of income in society.

Joint Venture Project

The project which is undertaken to produce goods and services through collaboration of foreign and local company's investors is called joint venture project. The ownership of these types of project is proportionately shared in an agreed ratio. The project is associate with transfer of raw materials, capital, information and technology and managerial skill in which country the project is implemented or required raw materials, components, technical and managerial know-how is supplied to the host company by foreign company. Therefore, these factors are supplied by parent company of foreign country to host company of local company under joint venture agreement.

The establishment of joint venture project is the result of large foreign country's desired to expand the business in other country. For this purpose, foreign companies make a joint venture agreement with small business company of host country to implement the project. Both companies play vital role to achieve the project success. However, joint venture projects are profit oriented. Joint venture business agreement is becoming very popular throughout the world due to globalization and advancement in information and technology. Its projects can involve equity participation for production, technology transfer, managerial contract and marketing.
 

Advantages of Joint Venture Project: 

• It takes advantage of lower level and raw material cost in host country.
• It provide greater employment opportunities to the people of host country.
• It helps to transfer resources, technology and managerial skills from country to country.
• It produces qualitative output.
• It makes market entry easier in foreign market.
• It helps to contribute the economic growth of any country.
• Its projects spread risks.

 Disadvantages of Joint Venture Project: 

• It may adversely affect the small local project of host country due to tough competition.
• It increases dependency on foreign countries.
• It may create employment opportunities to only skilled manpower.
• There is high possibility of conflict between foreign and local company.

Bi-Lateral Project

Project carried on under agreement between two countries or bi-lateral agencies or country is called the bi-lateral project. It is the result of an agreement or contract between two friendly countries. It is characterized by foreign aid based, adequate time for implementation, pre-determined planning and scheduling and maximum capital requirement, normal life cycle etc. Generally poor and developing country cannot implement large scale of project due to lack of sufficient capital, enhanced technology and skilled manpower. So they request to foreign country or donor agency of foreign country to provide assistant-ship project implementation. The foreign country or bi-lateral agency provide them loan or grants, specially they provide grants which may be in the form of cash or kind. Sometime donors themselves execute the bilateral project and handover the project to receipant country. However, the grants provided by donor agencies or country should not be repaid as an interest or principal by receipant country.
 

There are many bi-lateral projects in Nepal, in education, health, agriculture, hydro power sectors. For example B.P. Koirala Institute of Health and Science (Nepal and India), BICC (Nepal and China), Trisuli Hydropower (Nepal and India).

The developed country provide the assistant-ship to developing and underdeveloped country through their government or bilateral agency. The major agencies for forming bilateral project in Nepal are JICA (Japan International Co-operation Agency), GTZ (German Agency for Technical Co-operation), SDC (Swiss Agency for Development and Co-operation) etc.

Advantages of Bi-lateral Project: 

• It helps to improve the relationship between two countries.
• It facilitates for the development of infrastructure.
• Its funding is mostly grant-based so receipant country should not repay.
• It generates employment opportunities.
• It accelerates the economic growth of country.
• It facilitates the transfer of new and modern technology.

Disadvantages of Bi-lateral Project: 

• It promotes the depending on foreign country.
• It may be the means of getting own interest of donor agency.
• It creates the problems of nationality and other national disturbances.
• Donors may corrupt the developing countries, resources may be misused.
• Bilateral agencies may withdraw their aid or grants during the project period due to practical problems.

Labor Intensive Project

Labor intensive project is heavily based on labors. Therefore, it is also known as labor based project. It uses different types of work force of society, specially semi-skilled and unskilled manpower to perform the project task. There is very high involvement of labors and they play vital role in success of the project. The main objectives of the implementation of these kinds of project is to generate maximum employment opportunities to all categories of people in society. Thus, it helps to bring social equality and justice by equal distribution of income in society and maintain economic stability in the country. It utilized few technology in the process of project implementation. It requires less capital as compared to capital intensive project. Labor intensive project is more appropriate in those country where there is high availability of manpower, cheap manpower, low capital, low technology development.

Advantage of Labor Intensive Project:

• It provides high employment opportunities.
• It helps to maintain economic stability.
• They are very useful for countries having a vast pool of unemployed labor resources.
• They create economic stability in the country through employment. People's participation is promoted at local levels.
• It ensures optimum utilization of scarce resources.
• The wage differentials are not pronounced so as to bring social equality and justice.
• Its impact on environment is low.
• It requires less capital and use indigenous technology.
• It helps to increase per capita income.
• It also reduces import.

Disadvantages of Labor Intensive Project:

• It gives less priority to technology innovation and development due to labor based project.
• It effects the competitive capacity of the project.
• It is time consuming that lengthen the project life cycle.
• It is costly in long run.
• It is unable to handle complexities.
• Poor capital formation.
• It lacks improved and advanced skills.

Indigenous Project

Indigenous project refers to the project which is established in local level with local resources or funded from local resources. It uses indigenous materials, capital, skills, technology and work force to implement the project. It fulfills the indigenous need. There is no any contribution of skill, technology and fund in project implementation to attain the defined goal. Hence it blends indigenous technology with local resources in generating project outputs. Indigenous traditions, styles, system and cultures are carefully considered during its planning and implementation phase. Therefore, it helps to preserve and protect traditions and cultures.

Indigenous project needs small scale of capital, provide employment opportunities to local people, uses local resources and technique. In this sense, it is labor intensive project.

Advantages of Indigenous Project:

• It protects tradition and cultures.
• It makes possible maximum utilization of local resources and technology. Since indigenous project is labor intensive, it generates employment opportunities to local which helps to upgrade the living standard of people.
• It has special identity.
• Certainty of success may occurred.
• They also promote creativity and are culture friendly.

Disadvantages of Indigenous Project:

• It may not produce quality output due to the use of simple technology.
• It is rigid in terms of traditional system and procedures.
• It cannot handle the complexities.
• It is static and lacks dynamism.
• It cannot cover the national requirement.
• It reduces use of technology and development of technology.