What is the role of feasibility study in project construction?

The following is what Zhongda Consulting brings to you about the role of feasibility study in project construction for your reference.

The feasibility study is an important step in the preliminary work of construction and the basis for preparing the construction project design brief. Conducting feasibility studies on construction projects is an important basic work in capital construction management. It is a scientific method to ensure that construction projects achieve the best economic results with the minimum investment. Feasibility studies play a very important role in project investment decision-making and project operation and construction. important role.

1. The role of feasibility study in the early stage of construction

The feasibility study of an engineering project is the basis for determining whether to invest in the project. The reform of the investment system of the socialist market economy has changed the original system of unified allocation of investment by government finance into a diversified investment pattern by the state, local governments, enterprises and individuals, breaking the situation of free use by one owner and construction unit. Therefore, investment owners and national approval authorities mainly determine whether and how to invest in the project based on the evaluation results provided by the feasibility study, which is a decision-making document for the project construction unit.

The approved feasibility study is an important basis for the project construction unit to raise funds, especially when applying for loans from banks or subsidy funds from the state. It is also the basis for other investors to establish joint ventures. Any project that should seek bank loans or apply for state subsidy funds must submit a feasibility study of the project to the relevant departments. Only after banks or relevant national departments have reviewed the feasibility study and determined that the project is indeed feasible will they agree to provide loans or fund subsidies. International financial organizations such as the World Bank, as well as financial institutions such as my country Construction Bank and China Development Bank, all require the submission of feasibility studies as a prerequisite for applying for loans for construction projects.

The feasibility study is the basis for preparing the preliminary design of the project. Preliminary design is to plan a practical construction blueprint for the project to be constructed based on the feasibility study, that is, to plan the project's scale, product plan, overall layout, process flow, equipment selection, labor capacity, three waste management, Construction period, investment budget, technical and economic indicators, etc. And propose specific operation plans for the next step of implementing the project design. The preliminary design must not violate the principles that have been demonstrated in the feasibility study.

Feasibility studies are an important basis for national comprehensive planning departments at all levels to regulate and manage fixed asset investment and prepare development plans, fixed asset investments, and technological transformation investments. Since construction projects, especially large and medium-sized projects, take into account many factors, involve a wide range, and involve large amounts of funds, they may have a profound impact on the overall situation and the local economic life in the near and long term. For example, the Three Gorges Project not only costs a lot of money, /p>

The construction period is long and a large number of immigrants are required. Therefore, the feasibility studies of these projects are more detailed and can be used as an important basis for the comprehensive planning department to actually regulate and manage fixed asset investment and prepare national economic and social development plans. in accordance with.

In recent years, the state has proposed the implementation of a project legal person responsibility system. The prevailing administrative affiliation relationships and lack of economic responsibility in the past have been mostly replaced by contractual economic relationships. The project legal person and the project competent department can sign agreements and contracts with relevant domestic or foreign organizations and production owners on the raw materials, energy resources, transportation, engineering facilities, project contracting, water and electricity supply, and financing required for the project based on the approved feasibility study. The feasibility study is the basis for the project construction unit to formulate a supply and demand procurement plan for using new technologies and new equipment. In the feasibility study, if the feasibility analysis and demonstration of the adoption of new technologies and new equipment in the proposed project are feasible, the project construction unit can make plans for introducing new technologies and purchasing new equipment based on the plans drawn up by the feasibility study.

The approved feasibility study is the basis for the project construction unit to apply for construction land from the land development and land management department. Because the feasibility study proposes methods and measures for how to rationally utilize land for the proposed project, the national development department and land management department can specifically review the land use plan and handle land use procedures based on the feasibility study. In order to ensure that the project meets environmental protection standards, the feasibility study proposes governance measures and methods. This information can be used as the main basis for the environmental protection department to conduct environmental assessment of the project, specifically study governance measures, and issue project construction license documents.

In the feasibility study process, because a large amount of basic data is used, once the relevant terrain, engineering geology, hydrology, mineral resource reserves, and industrial experimental data are incomplete and cannot meet the needs of the next stage of work, , the department responsible for the preliminary design needs to further carry out relevant terrain, engineering geology, hydrology and other survey work or strengthen industrial experiments and supplement relevant data based on the requirements and suggestions put forward by the feasibility study.

2. The correlation between feasibility study and design project management

Feasibility study is an important basis for preparing the design brief, and is also an important step in preliminary design and project construction management. link. The feasibility study not only conducts systematic analysis and comprehensive demonstration of the proposed project to determine whether the project is feasible and worthy of investment, but also conducts repeated comparisons to seek the best construction plan and avoid huge human, material and financial resources caused by the change of project plans. Waste and time delays. This requires a strict approval system for project proposals and feasibility study reports to ensure the quality and sufficient depth of the feasibility study report.

If a high-quality, realistic design brief cannot be proposed in the early stages of design, and the construction intentions cannot be expressed in standard technical terms, it will naturally be impossible to effectively control the entire design process. If the preliminary design of the project fails to control the outline and main functions of the project, or if the construction drawing design is hastily entered with only a rough plan, problems will definitely arise in the design project management and construction.

If the overall goal in the feasibility study is not well controlled, the design process will be changed day by day, and the designer will be at a loss and lose sight of the other, often resulting in inherent deficiencies in the product. Therefore, the preliminary design estimate must be within the estimation control range of the feasibility study report. If the preliminary design is not approved, it shall not enter the construction drawing design stage. Major design changes must be reported to the original approval authority for approval. It is necessary to prevent the continuous additional investment during project construction from causing the project management to get out of control, resulting in "half-baked projects" and "bearded projects", which will bring huge losses to the country and investment owners.

The construction cost of an engineering project directly depends to a large extent on the feasibility study and design. If the design project management intervenes earlier in the early stages of construction to check for the owner and puts forward some functional requirements for the project design before design, the workload of changes in the design will be reduced and the design cycle will be shortened. Due to the incomplete design brief and insufficient depth of the feasibility study report, the designer has no way to start. The result is that the design drawings are drawn in general, and construction is carried out while designing. It is easy to rush and hastily submit drawings, which is difficult for construction and project construction management. bring difficulties.

In the real economic environment, owners and construction units hope to tap the potential to reduce project costs, especially some private and individual owners. They lack technical experts to certify and research their projects, so they issued a design brief The basic documents used as the basis for design are very irregular. It can vary from person to person. The terms are too simple and have poor enforceability. They often hide some problems that should be solved in the feasibility study. They cannot provide a good design environment for the design stage, resulting in undue repetition of the design work and even during the construction. Too many design changes occurred during the project, causing some projects to be abandoned and delayed. The best way to solve this problem is for the design project management to intervene as early as possible to assist the owner to improve the design brief and select an excellent design based on the construction scale, standards, investment limits, etc. This can make the issued design brief more realistic. It is easier to control construction standards and achieve the ultimate goal of controlling project costs.

Therefore, it is very necessary to do a good job in the two links of feasibility study and design project management. If these two links are not done carefully, wrong decision-making will not only result in no economic benefits for the project, but also the loss may be Tragic. Feasibility study and design project management is an important means to avoid investment decision-making errors and ensure responsibility for project construction and operating benefits after it is put into production.

3. Measures for conducting feasibility studies

In order to adapt to the needs of socialist modernization and market economic system reform, my country’s survey, design and engineering consulting units must achieve two major changes: The first is to transform enterprises and institutions from the past institutions affiliated to departments into independent market competition entities, and establish a modern enterprise system. The second is to transform the operating mechanism from a functional institution that was limited to a specific industry to carry out a single business to a social intermediary institution that provides services throughout the entire process of investment and construction and operates in accordance with market mechanisms. At present, it is of great practical significance to strengthen the internal reform of engineering consulting, survey and design enterprises and strive to improve the quality of the team.

China is about to join the WTO. Once it joins the WTO, foreign engineering consulting and design institutions will enter China, and the domesticization of international competition is imminent. This requires engineering consulting and design units to bravely go to the market, bring feasibility research and design work to a new level, change concepts, strengthen management, and enhance the sense of responsibility of technical personnel. Design is a bridge that transforms science and technology into productivity. Every line, every point and number on the drawing represents technical responsibility and a certain amount of funds. The quality of the design is directly related to the construction of the project. Therefore, the promotion and application of nDIC clauses in my country's engineering projects is an important way to achieve integration with international practices and ensure the quality of engineering construction.

The feasibility study should focus on quality control and conduct a realistic and scientific analysis of the project's scale, construction standards, process layout, industrial planning, technological progress and other aspects. Personnel engaged in feasibility studies must truly establish the spirit of serving the country and construction owners, be familiar with relevant national and local laws, policies, and regulations on project construction, accurately master relevant professional knowledge, constantly learn new technologies, and truly achieve scientific and Grasp the development direction of the industry independently and without any interference, improve the depth and quality of feasibility studies, and provide high-quality products to the society.

According to expert calculations, 70-85% of project investment can be controlled in the design stage, while only 15-35% can be controlled in subsequent construction, materials, and labor services. Design consultation and design review are internationally accepted practices and practices. Without these systems, it would be difficult to integrate with international standards. Therefore, in order to establish the authority of engineering consulting and design project management, promote the progress of design technology, and ensure the effectiveness of investment benefits, we must adhere to the principle of experts consulting experts, and we cannot engage in laymen consulting experts. This is of great significance to saving investment, improving the quality of survey and design, and safeguarding public interests and national interests from losses.

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