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Investing is now a very familiar matter in our daily lives. Construction projects are funded with significant capital sources, bringing many benefits to our country in recent years. So, what is an investment project? Because our country’s economic market is increasingly integrating with the world market, attracting many large domestic and foreign investors. Hopefully, the following article will help readers understand more about the above issue.
Concept of the investment project
In terms of form, an investment project is a document presenting in detail and systematically a construction plan, including activities and costs, to achieve results and specific future goals.
In content, an investment project is a set of interrelated activities planned to achieve specified goals by producing specific results within a particular time and using limited resources.
From a management perspective, an investment project is a tool to manage the use of capital, materials, and labor to create financial, economic, and social results over a long time.
Investment projects are the basis for competent state agencies to take measures to manage and license investment. A project is a series of linked activities designed to achieve specific results within a defined budget and time. It is the basis for investors to deploy investment activities and evaluate the effectiveness of the project. And especially, the investment project is essential in convincing the investor to decide to invest in the project and the credit institution to agree to finance the project.
Tasks that need to be done when creating a project
Doing an investment project is the last step in the investment preparation phase. To establish a quality and practical investment project, the investor must carry out many tasks, specifically as follows:
– Research and evaluate the investment market;
– Determination of investment time and investment scale;
– Selection of investment form;
– Conduct survey activities and select investment locations.
After completing the above works, the investor proceeds to an investment project. Investment projects are expressed in two documents:
Pre-feasibility report: A pre-feasibility report is a report that provides general information about the project. Thereby, the investor can make a preliminary assessment of the feasibility of the project. At the same time, select the most appropriate investment plan for the project.
Feasibility report: A report that collects data, analysis data, evaluation, and makes an official proposal on the content of the project according to the plan selected by the investor.
Contents of Pre-Feasibility Report
Specific contents in the pre-feasibility report include:
– Investment orientation, favorable conditions, and difficulties when implementing the project.
– Project size and investment form.
– Investment area and location: there is a specific analysis and assessment of issues such as the needs of land use, issues affecting the environment, society, resettlement, and labor if the construction works. built.
– Preliminary analysis and assessment of equipment, technology, techniques, and supply conditions of supplies, materials, services, and infrastructure.
– Selection of construction options.
– Preliminary determination of total investment, capital mobilization plan, ability to recover capital, repay debt and collect interest.
– There are evaluations of the project’s economic-social investment efficiency.
– Composition, the structure of the project: synthesis or subdividing the items.
Contents of the Feasibility Report
The grounds for determining the need for investment:
– Investment objectives;
– Investment location;
– Project scale;
– Investment;
– Time and progress of project implementation;
– Solutions on architecture, construction, technology, and environment;
– The plan on using labor, managing, and exploiting the project;
– Project management forms;
– Invest effects;
– Identify critical milestones for project implementation;
– List and tasks of units participating in project construction,
In general, the content of the feasibility report should meet some basic requirements such as legality, reasonableness, feasibility, efficiency, and optimization of the project to be built.
The preparation of the above reports is very professional. Hence, investors in the reporting process need to have the support of professional agencies, organizations, and other organizations. experts who have participated in project appraisal. Primarily if the project uses borrowed capital, it is advisable to invite both lenders ( credit institutions and investors … ) to participate right from the project formulation stage.
After completing the Pre-Feasibility and Feasibility reports, the investor must submit the above statements to the competent authority for investment verification (for projects subject to investment verification). At the same time, investors must also send investment capital to the lending organization (for projects using borrowed money).
Thus, completing two reports means that the investor has completed the investment project according to the plan. Finish the investment preparation phase and move to the stage of investment procedures.
Thus, preparing an investment project, namely the Pre-Feasibility Report and the Feasibility Report, is essential. It determines the success as well as ensures the legality of the project. After choosing a business plan, investors often need the support of Project Planning experts to complete these 2 Reports.
Thus, we have introduced to you what an investment project is. Hope that the above article will help you in the project’s construction process in the future. Visit our website, San Francisco Contractors, for more updates.