Meaning of Detailed Project Report (DPR)

  • As the identification and intention for the implementation of the project grow, the depth of the study for the probable project increases. Further analyses of the details relevant to such a project become imperative.

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  • We know that the feasibility report contains sufficient detailed information. It is from the study of the pre-feasibility or feasibility report that approval is made by the project owner (an individual or a project director/manager or the management of a company) for the investment on the projector for a request to prepare the DPR.

  • Preparation of DPR is a costly and time-taking job (which may even extend to one year) when reports of specialists from different streams like market research, engineering (civil, mechanical, metallurgical, electrical, electronics), finance, legal, corporate consultancies etc.—as relevant to the project itself—are considered in the DPR.

Objectives of Detailed Project Report (DPR)

  • The objectives in preparation of the DPR should ensure that:

  • A. The report should be with sufficient details to indicate the possible fate of the project when implemented.

  • B. the report should meet the questions raised during the project appraisals, i.e. the various types of analyses—be it financial, economic, technical, social etc.—should also be taken care of in the DPR.

  • The DPR should be punctilious of all possible details to serve the objectives and should also reflect, amongst other points, the followings aspects:

  • Technology and Design Aspects of Detailed Project Report (DPR):

  • Experience suggests that some projects are launched with clear objectives but with considerable uncertainty as to whether or how they will be technically achievable, not leading to project overruns. The DPR should deal with minimum technical uncertainties and the specialists’ findings/report in this area becomes helpful.

  • Innovative designs are found to be tougher than even the technical uncertainties—designs, as such, may appear innocuous and less costly but later, in reality, may be found completely different. Hence the DPR should deal with Technology and Design which have already been tested, thus minimizing the technical risk.

  • Before going to overseas technical collaborator the repertoire of established technology available within the country should be explored. It would be both cheaper and nationalistic!

  • A. Economic Aspects:

  • 1. the location of the plant, the benefit of such location including the available infrastructure facilities;

  • 2. the volume of the project, the capacity installed

  • 3. the availability of the resources and the utilization of such resources in a comparatively beneficial manner, e.g. the ‘internal rate of return’ projected as compared to the possible rate of return on investment from the market without inherent risks.

  • B. Social and Political Aspects:

  • Public attitude towards a project is becoming increasingly important—the displacement of people (Joint venture project for a major port at Gopalpur, TISCO’s expansion project at Gopalpur) and the concerned public attitude towards, the implementation of such a project can be very serious.

  • The environmental pollution, the ecological balance (or imbalance?), the potential employment all are of important considerations in the DPR.

  • The importance of ‘politics’ in a major project cannot be ignored—where the political considerations dominate. The ideal condition is that the project owners/management should be left to manage while the government should provide the necessary conditions to make it a success.

  • But, in reality, the assurance/commitments are often politically motivated even before the finalization of the DPR. Accordingly, the DPR should recognize this risky game.

  • C. Financial Aspects:

  • The prime importance of a project is the assurance of the timely availability of funds/ resources. The availability of funds is to be ensured throughout, i.e. during the implementation period as well as during the second part of the project when it is supposed to start generating income/benefit.

  • Whether such generation of income/benefit will be sufficient for the servicing of the borrowed funds to pay interest and also the repayment of principal as also the expected income from the owner’s capital invested in the project; whether such return on investment is adequate and, also, in excess of other possible incomes from such funds without taking the risk—these are the valid questions to be answered by the DPR.

Background of Detailed Project Report (DPR):

  • When the project is found definitely feasible, the DPR should stand with a background dealing with the recommendation for the project, as supported by the forecasted details for the coming years when the project is put into operation.

  • The background should also include details of the product, sizes with capacity, organization and the technical know-how involved:

  • 1. The project at a glance

  • 2. Market Report

  • 3. Technical details of the process involved and the plant layout

  • 4. Plant and Machinery and other equipment as required for the project

  • 5. Project Schedule

  • 6. Organisation

  • Total strength of personnel with their grades and the required training:

  • 1. Financial details of project costs, the source of financing

  • 2. Cost of Production

  • 3. Projected Profit and Loss Account

  • 4. Projected Balance Sheet

  • 5. Fund Flow Statement

  • 6. Interest and Commitment Charges

  • 7. Working Capital Requirements

  • 8. Debt Service Coverage

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