The goal of the feasibility study is to ensure that the planned project will provide an adequate technical alternative solution with the maximum return on investment. The feasibility report, in addition to meeting the alternative solution to the technical requirements, must satisfy both a customer’s financial restraints and at the same time the economic criteria related to return on investment.
From the technical prospective, the technical feasibility report should accomplish the following:
- Outline complete production and clarify support processes and workflow.
- Outline alternative technology selection criteria and their relevance to the production activities and processes.
- Outline technology alternatives, reason for selection and implications of each one of them.
- Indicate plant layout and all supporting utilities for alternative technologies and estimate/calculate the sizes and specifications for all support and utilities.
- Provide criteria for ranking alternative technologies and solutions.
- Supply specifications of the equipment and technologies to enable cost estimation and other engineering particulars needed for plant sizing and work scoping.
- Develop cost estimation methods for the plant and alternatives.
- Include cost estimates for each technology alternative.
- Submit recommendations on the proposed technology alternative and the major components and utilities.
In addition, the feasibility report’s forecast of market size and product demand along with financial analysis should accomplish the following:
- Indicate market Identification, establish market viability, estimate market size, and supply a dependable product-demand forecast.
- Develop a suite of integrated cost-estimation and calculation methods that cover all aspects of the plant operation and its life-cycle consumption, with an eye on the economic environment and factors affecting material and labour costs and rates.
- Indicate financial options, including project financing and alternative domestic-international participation, financing and credit-availability planning.
- Estimate financial risk and calculate risk in different financing options.
- Invoice project cost-estimation in multiple currencies, as needed.
- Appraise returns on capital invested.
Also, the project and program management estimates should do the following with respect to the project and investment:
- Estimate the project engineering, procurement, construction and commissioning timelines.
- Forecast the cost and size of different phases of the project
- Develop the team and organization required for the engineering, procurement, construction and commissioning of the project.